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

Total ordering and holding costs, A manufacturing company has determined fr...

A manufacturing company has determined from an analysis from its accounting and its production data for a certain part that its demand is 9000 units/annum and is uniformly distribu

Create a demand schedule and a supply schedule, Create a demand schedule an...

Create a demand schedule and a supply schedule for your product. Using these schedules, draw a demand curve and a supply curve using PowerPoint or Excel. Use these to deter

Objectives of the sales promotion, Objectives of the sales promotion: the m...

Objectives of the sales promotion: the major objectives of the sales promotion are: 1.       To increase buying response at the customers level, 2.       To increase t

Places, what are the identifying the major channel alternatives ?

what are the identifying the major channel alternatives ?

Marketing research, Marketing Research Marketing  research,  one  of  ...

Marketing Research Marketing  research,  one  of  the  components  of  an  information  system,  include collecting information relevant to a particular marketing problem faci

Brand promotion, Can brand promotion technique benefit an organization by i...

Can brand promotion technique benefit an organization by increasing its sales or hitting competitive brands may leave a negative impression on the customers?

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

Method of determining prices or setting price, Method of determining prices...

Method of determining prices or setting price: Cost of the production of a product is the most important determinant of its price. They may be many types of costs such as fi

Explain about the increased profitability in e-commerce, Explain about the ...

Explain about the increased profitability in e-commerce. Increased Profitability: a. The direct cost to sale for an order taken through a web site is lower as compared to

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