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

Discuss the following topic, 1.Value delivery process and value chain 2.A h...

1.Value delivery process and value chain 2.A holistic marketing framework 3.Business unit strategic planning 4.Internal records 5.Demographic environment

State what is meant by perceived risk, Question: Consumers have to cons...

Question: Consumers have to constantly make decisions regarding what products or services to buy and where to buy them. Because the outcomes of such decisions are often uncerta

Component of physical distribution management, Question 1: Describe the...

Question 1: Describe the classification of retailer in detail. Definition of Retailer Classification of Retailer Question 2: Explain the four principal com

What are suppliers firms and resellers in microenvironment, What are Suppli...

What are Suppliers Firms and Resellers in the Microenvironment of a company? Suppliers: Suppliers Firms and individuals which provide the resources required by the company

Explain the stage involved in the product life cycle concept, QUESTION 1 ...

QUESTION 1 (a) Explain the stages involved in the Product Life Cycle concept and their relevance in marketing decision making. You may use any product/service as an example to

What is analytical or analytic mean, If somebody is analytical then it mean...

If somebody is analytical then it means the one is always thinking about things - analyzing, pondering, etc. A one who is analytical will have all of the facts about something befo

Briefly discuss the three major steps in target marketing, QUESTION ...

QUESTION Briefly discuss the three major steps in target marketing Suppose you are going to purchase a mobile phone, explain how you would apply the three levels of produ

Explain the types of advertising appeal, Question 1: (a) Organisations...

Question 1: (a) Organisations make use of advertisements to promote its products and services. Explain the types of advertising appeal that are used. (b) Civil Society Org

Selling concept and marketing oriented concept, Question: (a) Give five...

Question: (a) Give five differences between the selling concept and marketing oriented concept. (b) Define the roles of advertising, sales promotion, personal selling and pu

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