Describe the Three Ways Services Can Be Classified

question 80

Essay

Describe the three ways services can be classified.

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Definitions:

Marginal Utility

The increased contentment or advantage obtained by the consumption of an extra unit of a good or service.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit to consumers from participating in the market.

Utility

Utility refers to the total satisfaction received from consuming a good or service.

Diminishing Utility

The principle that as consumption of a good or service increases, the marginal utility derived from each additional unit decreases.