Identify the optimal number of listings to review

Reference no: EM131004091

Anthony and Linda are considering buying their own home.They intend to begin the process by conducting an online search of real estate listings.The value of their time in reviewing each listing is $5.The first five listings that appear as a result of their search most closely match their stated preferences and therefore are the most valuable. Each additional five are less likely to match what they are looking for and therefore are less valuable.The marginal benefits of additional sets of listings are as shown in the table. In the diagram, draw a marginal cost curve illustrating the cost of their time for searching and reviewing each listing. Add the marginal benefit data. Identify the optimal number of listings to review.

Quantity of Marginal Benefit of

5	$ 25
10	17
15	11
20	5
25	0

Information Information

1	$ 0
2	1
3	3
4	6
5	10
6	15

Reference no: EM131004091

Questions Cloud

What is your understanding of the sociological imagination : What is your understanding of the Sociological Imagination, and how would you apply it in Everyday Life

Research a recent antitrust case at the department : The best place for finding late-breaking information about antitrust activity is in the "Legal Beat" column of the Wall Street Journal. You can find it inside the Marketplace section. Try to find at least one relevant article and determine the bas..

Horizontal common-size analysis for sales : a. Using Year 1 as the base, prepare horizontal common-size analysis for sales and net accounts receivable. b. Compute the accounts receivable turnover for Years 2-5. (Use net accounts receivable.)

What do you think about investing in this manner : What do you think about investing in this manner? What do you know about the relative advantages and disadvantages of this approach to investing?

Identify the optimal number of listings to review : Anthony and Linda are considering buying their own home.They intend to begin the process by conducting an online search of real estate listings.The value of their time in reviewing each listing is $5.The first five listings that appear as a result..

How to you interpret the consumer market data : As a consultant to Dana Wheeler, how to you interpret the consumer market data? What is the expected outcome of each of the targeting scenarios

Value of the firm under two-period perfect certainty model : If you want to consume $723 now, how much would be the value of the firm under two-period perfect certainty model?

Compute the cost of goods sold : Compute the cost of goods sold for the year ended December 31, 2007, and the ending inventory under the following cost assumptions:

Explain how the time and financial requirements involved : Explain how the time and financial requirements involved in obtaining a McDonald's franchise relate to the hidden- characteristics problem.Why would existing franchise owners have an interest in the maintenance of high application standards for ne..

User Account

All Pages