Eating a certain amount, Managerial Economics

Jeremy is an economics learner who loves hamburgers. He could eat any number of them for dinner, but he gets a really bad stomach ache after eating a certain amount. In fact, his utility function for hamburgers is given by


where Q is the number of hamburgers he eats for dinner (with Q ≥0).

(a) How many hamburgers can Jeremy eat before he gets a stomach ache (that is, before hisutility becomes negative)?

(b) Determine  the optimal number of hamburgers that Jeremy can eat as a function of p, the price per hamburger. (Hint: You have to maximize Jeremy's "net utility". That is, his utility minus the amount he spends on hamburgers.)



Posted Date: 3/26/2013 2:46:11 AM | Location : United States

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