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

Promotion mix tools to promote and sell your new product, You will develop ...

You will develop an effective marketing communication for a new product (Diet cupcakes) that you have still created and launched it on Abu Dhabi market. In this assignment you are

Market or market segment , Michael Porter's Five Forces model is as applica...

Michael Porter's Five Forces model is as applicable today as when it was introduced. Select a market or market segment (jeans, cell phones, etc) and using Michael Porter's model, c

Define product line and its strategies, Question 1 Describe the stages ...

Question 1 Describe the stages in consumer decision making process Question 2 Define Product line and its strategies Question 3 Write a short notes on Ste

Marketing, in context of marketing, explain three approaches that were use ...

in context of marketing, explain three approaches that were use in early days

Promotion mix, Developing a promotion mix is contingent on many factors, in...

Developing a promotion mix is contingent on many factors, including the type of product and the product''s attributes. Which of the four promotional methods-advertising, personal s

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

What are the certain limitations of packaging, What are the certain limitat...

What are the certain limitations of packaging? Packaging is one of the way by which Marketer can distinguish his product by the competitors brand. In spite of having different

Explain the term open book management in shortly, Explain the term Open boo...

Explain the term Open book management in shortly. Open book management: The practice of sharing financial and performance information is frequently considered to as open

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