Ask Question
20 October, 10:28

Maurice has the following utility function: U (X Y) = 20X+80Y-X^2-2Y^2, where X is his consumption of CDs with a price of $1 and Y is his consumption of movie videos, with a rental price of $2. He plans to spend $41 on both forms of entertainment. Determine the number of CDs and video rentals that will maximize Maurice's utility?

+4
Answers (1)
  1. 20 October, 11:45
    0
    7 Cd abd 17 movie videos maximize the utility function in 873

    Explanation:

    We solve this using excel solver:

    A B C D

    1. - CD Movie

    2. - Price 1 2

    3 - Q 7 17

    4. - Subtotal 7 34 41

    The subtotal are Price per quantity on each product

    and then we add them to get the total.

    The we write the utility function

    =20*B3+80*C3-POWER (B3; 2) - 2*POWER (C3; 2)

    Utility 873

    We will maximize hat function by changin cell B3 and C3

    with the constrain of D4 lower or equalt to 41
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Maurice has the following utility function: U (X Y) = 20X+80Y-X^2-2Y^2, where X is his consumption of CDs with a price of $1 and Y is his ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers