Utility
Plain definition
Utility is the satisfaction or benefit a consumer gets from consuming goods and services. It is the foundation of demand theory: consumers are assumed to choose the affordable bundle that maximizes their total utility.
In economics
Modern economics treats utility as ordinal — a ranking of preferences — rather than a measurable cardinal quantity; only the ordering of bundles matters for choice. Utility maximization subject to the budget constraint yields the demand curve, and diminishing marginal utility explains why demand slopes downward.
Example
Choosing between a 200-rupee thali and a 200-rupee pizza, you pick the pizza because it gives you higher utility — it satisfies you more. No one measures that satisfaction in units; your choice itself reveals the ranking.
Utility is often imagined as something objective and measurable, like temperature — units you could read off a meter. In modern theory, utility is purely subjective and ordinal: it only needs to rank options (pizza beats thali beats nothing). Two people can assign wildly different utility to the same meal, and both are right for their own choices.