Comparison between Cardinal and Ordinal Utility
Basis |
Cardinal Utility |
Ordinal Utility |
Meaning |
The measurement of utility or satisfaction derived by a consumer after consuming goods or services in numerical terms. |
The measurement of utility or satisfaction derived by a consumer after consuming goods or services in qualitative terms. |
Realistic |
Cardinal utility is less realistic. |
Ordinal utility is more realistic. |
Approach |
It is a quantitative approach. |
It is a qualitative approach. |
Measurement |
Cardinal utility is measured in utils. |
Ordinal utility is measured in ranks. |
Analysis |
Cardinal utility is measured by Marginal Utility Analysis. |
Ordinal utility is measured by Indifference Curve Analysis. |
Theory of Consumer Behaviour
Consumer Behaviour is the study of individual customers, organizations, or groups’ behaviour while selecting, purchasing, using, and disposing of goods, ideas, and services so they can meet their wants and needs. In simple terms, consumer behaviour is the study of consumers’ actions and reactions in the marketplace and the reason behind their actions.