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

Direct marketing, DIRECT MARKETING: Meaning: direct marketing (DM) is...

DIRECT MARKETING: Meaning: direct marketing (DM) is the process by which a firm approaches its customers on one to one basis and markets its products directly to them. In con

When addressing objectives in an organization, Question 1: (a) What are...

Question 1: (a) What are the qualities that are required for a PR Practionner? (b) What is a corporate image? (c) What in particular distinguishes propag

What are the developmental stages, The marketing agent of a long distance p...

The marketing agent of a long distance phone service of the PhoneLink Co Ltd sells to a potentially high usage customer wireless service on three cell phones and includes a bonus o

Approches in test marketing, what are thepproaches used by FMCG companies i...

what are thepproaches used by FMCG companies in test marketing?

What is test marketing strategy development, What is Concept Testing Strate...

What is Concept Testing Strategy Development? Test Marketing: Throughout this stage the product is in fact tried out in selected Market Segments only based upon the result

Administrative law from civil law and criminal law, Question 1: How dif...

Question 1: How different is administrative law from civil law and criminal law? Explain your answer by giving examples and citing court decisions. Question 2: What are

Test marteting, various approches of test marketing in FMCG

various approches of test marketing in FMCG

Marketing mix, what is the difference between perception and positioning in...

what is the difference between perception and positioning in marketing mix

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