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

Explain the role of human resource accounting, Question: The recognitio...

Question: The recognition of human capital by modern businesses has led to the development of Human Resource Accounting (HRA). Required (a) Describe the following terms:

Explain different types of headlines, Q. Explain Different types of Headlin...

Q. Explain Different types of Headlines ? Different Forms of Headlines:- Direct Benefit Headlines Question Headlines Announcement Headlines. Provocative He

Amit Kumar, Assume that you are James Peterson and you have just hired a ne...

Assume that you are James Peterson and you have just hired a new management team composed of highly qualified executives from outside companies.

Test marteting, various approches of test marketing in FMCG

various approches of test marketing in FMCG

Tender pricing, Tender Pricing : Business firms are frequently required ...

Tender Pricing : Business firms are frequently required to fix the prices of their products on a tender basis. It is more applicable to industrial products and products purchase

Product planning, Product Planning : To perform the responsibilities th...

Product Planning : To perform the responsibilities the marketing managers follow  a  marketing  process  and  the  product managers  come  up  having  a marketing plan for indi

Marketing environment, Marketing Environment In order to properly iden...

Marketing Environment In order to properly identify opportunities and monitor threats, the company ought to begin with a thoroughgoing understanding of the marketing environme

Business process, marketing business process of automobiles company.

marketing business process of automobiles company.

Suman, Discuss the Henry Assael model on buying decision behaviour.

Discuss the Henry Assael model on buying decision behaviour.

Meaning of price, Meaning of price: Price is the marketing mix element...

Meaning of price: Price is the marketing mix element that product revenue, the other producer costs. Price is also one of the most flexible elements: it can be changed quickly

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