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 about the consumer behaviour studies, Explain about the consumer be...

Explain about the consumer behaviour studies. The consumer behaviour studies which how individual organization and groups select buy employ and dispose of goods and services, e

What is place utility in marketing, What is Place Utility in marketing? ...

What is Place Utility in marketing? Place Utility: This utility is given when a marketer gives the product at locations preferred through the all customers. Domino’s pizza

Message - source of advertisement, Q. Message - Source of advertisement? ...

Q. Message - Source of advertisement? Message-Source:- Person who converse the message of advertiser to the target audience. Also known as brand-ambassador instance sport

Describe how branding can benefit a tourism, Question 1: a) Explain dif...

Question 1: a) Explain different types of pricing techniques. As a consumer which method do you personally prefer to deal with? Justify your answer. b) Describe how brandi

Explain in detail the various steps in menu costing, Question 1: You ha...

Question 1: You have just been appointed as Food & Beverage Controller of a medium -size hotel and you have been requested to set up a new control system. (i) Explain in d

Define one disadvantage of online buyers, Define one disadvantage of online...

Define one disadvantage of online buyers when dealing with unfamiliar sellers. One disadvantage of online buyers: Lack of trust is there observably as buyer cannot phy

What is product strategy development, What is Product Strategy Development?...

What is Product Strategy Development? Product Strategy Development: Based onto corporate goals and strategy. The corporate function for new product is found. The external

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