Question

• Is Utility & satisfaction are same concept. Explain in your answer in detail with your own example. • Prices can shift supply of a product Explain your answer with yes or no with explanation. Best of Luck

Answer 1

Q1.

The utility is different from satisfaction in the sense that utility is the cause and satisfaction is the effect. The utility is the inherent ability of the commodity to satisfy a want and satisfaction is what comes from the consumption of that commodity. So utility is already present in the good irrespective of whether it is consumed or not or the satisfaction is obtained or not.

Q2.

Yes

According to the Law of supply, It states that other factors remaining constant, price and quantity supplied of a good are directly related to each other. In other words, when the price paid by buyers for a good rises, then suppliers increase the supply of that good in the market.


Description: Law of supply depicts the producer behavior at the time of changes in the prices of goods and services. When the price of a good rises, the supplier increases the supply in order to earn a profit because of higher prices.

Supply curve P1 P2 Price P3 Q2 Q1 Q3 Quantity supplied

The above diagram shows the supply curve that is upward sloping (positive relation between the price and the quantity supplied). When the price of the good was at P3, suppliers were supplying Q3 quantity. As the price starts rising, the quantity supplied also starts rising.