Utility Analysis

Posted: January 5th, 2023

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Utility Analysis

Utility analysis may help to acquire valuable information about consumer behavior. The concept helps understand how consumers achieve maximum satisfaction by spending their income on different goods and services (Khan[BG1] ). Besides, the idea describes and explains what influences the usefulness or appropriateness of decisions options and looks at how information may influence decisions (Wellay et al.). Utility analysis helps to explain that people demand health because  this fundamental requirement determines[BG2]  one’s well-being, so health is a priority.[BG3] 

The law of diminishing marginal utility provides some insight into why people demand health. The law stipulates that a person consumes a product or gets a service [BG4] while the satisfaction they get from the item depreciates as they use more and more of the product or service (Alvino et al. 98; Lin and Shi-Shu;  Tripathy and Kumar [BG5] 36). However, that principle may not apply to health [BG6] when people will continue to demand the service as long as they are alive. People become sick from time to time or may require some health-related information or assistance, which does not create the possibility that the utility or contentment they receive from the service will wane as they get more care. Thus, the law of diminishing marginal utility does not apply [BG7] to health care.

[BG8] The price elasticity of demand for medical care is expected to vary with health status. [BG9] Price elasticity of demand measures the transformation in consumption of a product concerning a change in its price (Petricek et al. 3; Vukadinovic et al. 678). A healthy person is less likely to spend on medical care, especially when the price increases, contrary to a sick person who continues to seek medical attention regardless of price changes. [BG10] 

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Works Cited

Alvino, Letizia, [BG12] et al. “Towards a Better Understanding of Consumer Behavior: Marginal Utility as a Parameter in Neuromarketing Research.” International Journal of Marketing Studies, vol. 10, no. 1, 2018, pp. 90-106. doi:10.5539/ijms.v10n1p90[BG13] . Accessed 14 Aug. 2021.

Khan, Muhammad Akram. “Theory of Consumer Behavior: An Islamic Perspective.” Munich Personal RePec Archive, MPRA Paper No. 104208, 2020. mpra.ub.uni-muenchen.de/104208/1/MPRA_paper_104208.pdf. Accessed 19 Aug. 2021.

Lin, Chung-Cheng, and [BG14] Peng Shi-Shu. “A Rehabilitation of the Law of Diminishing Marginal Utility: An Ordinal Marginal Utility Approach.” The Journal of Theoretical Economics, 2021, doi:10.1515/bejte-2020-0158. Accessed 14 Aug. 2021.

Petricek, Martin, et al. “Identification of Consumer Behavior Based on Price Elasticity: A Case Study of the Prague Market of Accommodation Services.” Sustainability, vol. 12, no. 9452, 2020, pp. 1-14. doi:10.3390/su12229452. Accessed 14 Aug. 2021.

Tripathy, Asima, and Pradhan Kumar. “Hidden Subjective Aspects in the Law of Diminishing Marginal Utility: The Initial Bump and Limitations of Neuroeconomics.” Indian Journal of Public health Research & Development, vol. 12, no. 1, 2021, pp. 33-39. doi:10.37506/ijphrd.v12i1.13827. Accessed 14 Aug. 2021.

Vukadinovic, Predrag, et al. “The Analysis of Indiference and the Price Elasticity of Demand between Different Categories of Agricultural Products.” Economics of Agriculture, vol. 64, no. 2, 2017, pp. 671-85. scindeks-clanci.ceon.rs/data/pdf/0352-3462/2017/0352-34621702671V.pdf[BG15] . Accessed 14 Aug. 2021.

Wellay, Tsegay, et al. “Demand for Health Care Service and Associated Factors among Patients in the Community of Tsegedie District, Northern Ethiopia.” BMC Health Services Research, vol. 18, no. 697. doi:10.1186/s12913-018-3490-2[BG16] . [BG17] 

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Dear Sharon,

With minor style, grammar, formatting, and careless mistakes, and a 5% fine for the non-credible source, your share is 80%.

Regards,

Barbara

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https://owl.purdue.edu/owl/research_and_citation/mla_style/mla_formatting_and_style_guide/mla_works_cited_page_books.html

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