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

Market segmentation, explain what you understand by market segmentation?

explain what you understand by market segmentation?

Distribution, i want to know the type of distribution strategy that a compa...

i want to know the type of distribution strategy that a company specialising in major appliance like refridgeration and washing machines can use?

Explain marginal approach to ad-budget, Marginal Approach to Ad-budget: - ...

Marginal Approach to Ad-budget: - In this schema advertisement budget is decided on the basis of marginal costs and marginal revenue of advertising. Marginal cost here signifies i

Case study, AThe rise of personal computers in the mid 1980s spurred intere...

AThe rise of personal computers in the mid 1980s spurred interest in computer games. This caused a crash in home Video game market. Interest in Video games was rekindled when a num

#title.culture and consumer behaviour., A firm is intending to operate acro...

A firm is intending to operate across a number of markets in the world.you have been hired to help them in finding consistent methods to analyse their cross culture markets.Using r

Marketing environment, identify the major trends in the firm''s natural and...

identify the major trends in the firm''s natural and technological environment.

Marketing as a discipline, Define the marketing by as a Discipline. Ma...

Define the marketing by as a Discipline. Marketing as a Discipline: The subject of marketing has involved out of business that has derived its existence by economics. But

Discuss the significance of a customer retention strategy, Question 1: ...

Question 1: "Relationship Marketing is a new marketing paradigm which challenges the straight-jacket marketing mix approach." Evaluate this statement and illustrate with examp

Wilbur schramm’s modal, WILBUR SCHRAMM'S MODAL A well-known communicati...

WILBUR SCHRAMM'S MODAL A well-known communication expert gives a important contribution in the field of communication. He customized the Shannon & Weaver's Model of communic

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