Allocate budget to total utility, Marketing Management

Assignment Help:

Jack is deciding how to spend the $6 budget he has allocated for today's telephone calls.  There are only two people he intends to call:  his girlfriend Jill, and his old high school friend, Steve.  Jack's love for Jill is such that he could talk to her forever; the marginal utility of a minute talking to Jill is a constant ten utils, regardless of the number of minutes he talks.  Steve usually has a lot of interesting news, but he becomes dull and boring after awhile; the marginal utility of talking to Steve is given by the equation:

                                                      MU = 60 - 2M

      where M is the number of minutes they have talked so far.  So, the first minute gives Jack 58 utils, the second minute gives him 56 utils, etc.

      It costs 5 cents per minute to call Jill, and 10 cents per minute to call Steve, who lives farther away. 

      How should Jack allocate his budget of $6 to maximize his total utility?  In other words, how many minutes should Jack spend talking to Steve today, and how many minutes talking to Jill?


Related Discussions:- Allocate budget to total utility

#titleSOLUTION.., Ask a managing director of a large company made the follo...

Ask a managing director of a large company made the following statement: "to be successful in business, all you need is a customer. you don''t need any of those tight little academ

Concept of product life cycle, Considering the concept of product life cycl...

Considering the concept of product life cycle, where would you put video games in their life cycle?

State the term premium pricing briefly, State the term Premium Pricing brie...

State the term Premium Pricing briefly? Premium Pricing: This price strategy applied to various version of to similar product. It is a better version and a fundamental or

Ethical choice of the market targets, Ethical choice of the market targets:...

Ethical choice of the market targets: Market targeting sometimes generates public controversy. The public is concentred when the marketers take unfair advantage of valuable gro

State the concept of marketing as an exchange, State The Concept of Marketi...

State The Concept of Marketing as an Exchange Concept of exchange, according to most marketing academics and practitioners, is central to our understanding of marketing. For a

Use of pareto principle, 1. How do you use the indicators on your car dashb...

1. How do you use the indicators on your car dashboard? It's worth taking a moment to think about how the car's performance (KPIs) is conveyed through the dashboard of the car. Thi

What is economic utility of marketing, What is economic utility of marketin...

What is economic utility of marketing? Economic Utility of Marketing: The extent to that, a product satisfied customer requirements and wants is called utility. The amount

Algebra 1, I need duh help and duh fast beech

I need duh help and duh fast beech

Describe participants of distribution channels, Describe the important role...

Describe the important roles participants of a distribution channels. Participants in the Channel: There are two kinds of participants into the channel. The first partici

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd