What is defined as the capacity of a commodity to satisfy human want?

The concept of utility is fundamental in economics and is defined as the capacity of a commodity to satisfy human wants. It reflects the subjective value that individuals place on goods and services based on their preferences and needs. Utility can vary from person to person; what may provide high satisfaction to one individual may offer little or no satisfaction to another.

In economic terms, utility is a measure of the benefit derived from consuming a good or service. It plays a critical role in decision-making, influencing how resources are allocated and how individuals prioritize their spending. This concept underlies many theories in economics, including consumer choice theory, which examines how consumers make decisions to maximize their overall satisfaction given their budget constraints.

Other options represent different concepts that do not focus specifically on the capacity to satisfy human wants in the same way. For instance, necessity refers to essential goods required for survival, while luxury pertains to non-essential goods that offer additional satisfaction but are not vital. Discount relates to price reductions and is not relevant to the satisfaction aspect of commodities. Thus, utility is distinctly positioned as the correct answer in this context.