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

Marketing, Does marketing exist solely to increase profit? If this is the c...

Does marketing exist solely to increase profit? If this is the case, then marketing in nonprofit organizations can be said to be useless. discuss

Case study: left or right(competent motors limited), 1.if you were one of t...

1.if you were one of the other foremen, what could oyu do to make Rajinder''s transaction easier? 2. what would you have done if you were in Rajinder''s shoes? why?

shipping and purchasing the product, Ordering Stock for ProductPusher ...

Ordering Stock for ProductPusher An important part of your duties as manager is to determine how much of each product to order for ProductPusher's monthly stock inventory.  Yo

1. “Consumer mind is a Black Box” –Discuss, #ques1. “Consumer mind is a Bla...

#ques1. “Consumer mind is a Black Box” –Discusstion..

Store layout, Store layout The word store layout refers to: How stor...

Store layout The word store layout refers to: How store fixtures and display gondolas are positioned within the store The size of the store fixtures and display gondolas

Context and marketing communications, Context and Marketing Communications ...

Context and Marketing Communications Organisations can be seen as open social systems (Katz and Kahn, 1978) in which all components of the unit or system are interdependent an

Matrices, create a problem tat deals with transportation between five towns...

create a problem tat deals with transportation between five towns or cities represent it with a graph and a matrix, cube the matrix and interpret the resulting matrix, then explain

Straight rebuy, what are some situation of straight rebuy

what are some situation of straight rebuy

TEST MARKETING, what is text marketing and explain the various approaches t...

what is text marketing and explain the various approaches that are followed by FMCG companies in Test marketing

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