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

Define the concept of relationship marketing, Question 1: (a) Using an...

Question 1: (a) Using an example from the local context, explain how an organisation can counter negative publicity. (b) Discuss the impact that customer retention has on

Marketing in words of philip kotler, Define marketing in words of Philip Ko...

Define marketing in words of Philip Kotler. In the opinion of Philip Kotler, he explains that “Marketing is a social and managerial process by that individuals and groups acqui

Amazon, AMAZON internet marketing strategies.

AMAZON internet marketing strategies.

Concept of marketing information system, Concept Of Marketing Information S...

Concept Of Marketing Information System: marketing information system (MKIS) is an orderly procedure for the regular collection of raw data both internally and externally and the

Test marketing., explain the various approaches better followed by smcg com...

explain the various approaches better followed by smcg companies in test marketing?

What is segment marketing, What is Segment Marketing? Segment Marketi...

What is Segment Marketing? Segment Marketing: A segment market comprises a large identifiable group in whole market. Company’s practice segment marketing recognizes which

Marketing process, explain the various elements of marketing process

explain the various elements of marketing process

Environmental Apprisal, Why is environmental appraisal important for an org...

Why is environmental appraisal important for an organization

Pricing, how cost structure influence o in pricing a product/

how cost structure influence o in pricing a product/

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