Posted in Marketing and Strategy Terms, Total Reads: 244
Definition: Use Value
A commodity has a use which is its use value. It is the utility of consuming a good. It is the subjective subjective value designed to fit the requirement of one owner but with little use to another owner. It is the want satisfying power of a good or service. Use value tells us commodity satisfies a social need.
Any product has a labor value, a use value and an exchange value. Difference between use value and exchange value -
It is tied to the physical properties of the commodity
It advocates that two commodities can be exchanged in the open market on being compared with the third function that is universal equivalent mostly money
Commodity may have high use value but low exchange value for example diamonds. Some use values requires no effort to attain like air, sun, gravity while others require. A finite amount of labor could be put into production of use values, which keeps changing with change in technology.
Use value exists only for a person using the commodity. Use value and exchange value forms two opposing opinions. For example, a tomato seller has no use for tomatoes but is only interested in its exchange value. Once the commodity is consumed, it looses its exchange value.
Objective characteristics of use values are –
1. Development and expansion of market trade
2. Technical relationships between different economic activities for example across a supply chain