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

Test marketing, explain the various approaches that are followed by FMCG co...

explain the various approaches that are followed by FMCG companies in test marketing?

Ambush marketing, Ambush Marketing is a purposeful attempt by a business o...

Ambush Marketing is a purposeful attempt by a business or brand to relate itself with an occasion (often a sporting event) so as to gain some of the advantages related with being

Illustrate the term -a world of marketing communications, A World of Market...

A World of Marketing Communications All organisations - small and large, commercial, government, charities, educational and other not-for-profit organisations - need to communi

Explain about the efficiency rationale for intermediaries, Explain about th...

Explain about the efficiency rationale for intermediaries. Efficiency rationale for intermediaries: Intermediaries occur within the process of exchange and they can enhan

Case study, how should shoppers'' stop develop its demand forecasts?

how should shoppers'' stop develop its demand forecasts?

Marketing, marketing strategy for guess perfume

marketing strategy for guess perfume

Explain about the technology and organizational structure, Explain about th...

Explain about the Technology and Organizational Structure. Technology and Organizational Structure: Technology affects the Human Resource Structure as within the given wa

Fundamental marketing concepts, Q.  Explain some fundamental marketing con...

Q.  Explain some fundamental marketing concept? Ans.: The several fundamental concepts are :- (1) Exchange Concept: Exchange concept holds the concept that the exchange

What is swot analysis?, SWOT Analysis is a strategic planning method used t...

SWOT Analysis is a strategic planning method used to assess the internal & external environment in which a company operates and competes. Internal environmental factors are classif

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