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

Public relations practitioners, Question : (a) "There are those-usually...

Question : (a) "There are those-usually who have never experienced a crisis- who say that planning for a crisis is a waste of time because it is planning for something that wil

International bonds and markets, International Bonds and Markets (a) ...

International Bonds and Markets (a) Calculate both Macaulay and modified durations of the 8-year, 8.5% coupon bond given a flat yield curve a 10%.

Describe the desirable features of redesigned remuneration, The company 2TW...

The company 2TW manufactures and sells products overall Europe and is organised into dozens of strategic business units (SBUs). SBU managers, who report to regional directors, have

Explain information search in decision making process, Explain about the in...

Explain about the information search in decision making process. Information Search : Information searching can be within both ways Formal as well as Informal. In formal m

Tutor marked, factors which decide the broad area of scientific activity

factors which decide the broad area of scientific activity

Current marketing and internal firm environments, Your first assignment is ...

Your first assignment is to conduct a marketing audit on your chosen product. Information that will assist you to analyze this firm can be found on the internet, you can look to fi

Test marketing, various approches followed by FMCG companies in test market...

various approches followed by FMCG companies in test marketing

Circle, ABCD is a cyclic quadrilateral.O is the center of the circle if BOD...

ABCD is a cyclic quadrilateral.O is the center of the circle if BOD=16+0.find BPD

What are aspects of activities use in green marketing, What are aspects of ...

What are aspects of activities use in green marketing? At workshop of green ecological marketing was explained as the study of the positive and negative aspects of activities

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