week 2 assignment marketing class.docx

Price would be multiplied by 15 being that it is half

Info icon This preview shows pages 3–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Price would be multiplied by 1.5 being that it is half as important as taste. Then Location would be multiplied by 1 being that taste is 3 times more important than this factor. This would appear as follows for both businesses: Steak- (80*3)+(55*1)+(65*1.5)= total utility of 392.5 Pizza- (70*3)+(80*1)+(50*1.5)= total utility of 365 In this situation being that the steak restaurant has the higher total utility Patricia should pursue this business. b. Which of the two options should she pick if she plans to open a restaurant in the Los Angeles metropolitan area? Describe your answer, and show your calculations. -If Patricia wanted to pursure opening a restaurant in the metropolitian area of Las Angeles versus a suburban area the best option would be to first consider the total utility of both businesses in that area the same as previously. The business that has the higher total utility would be the most economical decision to make because it provides the bigger benefit and or revenue. Being that we are using the metropolitan area you would have to multiply the ratio to each attribute for example, the location section would be multiplied by 3 being that it is 3 times as important compared to taste. Price would be multiplied by 1.5 being that it is half as important as location. Then taste would be multiplied by 1 being that taste is 3 times less important than the location factor. This would appear as follows for both businesses Steak-(55*3)+(65*1.5)+(80*1)=342.50 Pizza-(80*3)+(50*1.5)+(70*1)=385
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Week 2 Assignment 4 In this situation the Pizza restaurant would be the best option to pursue being that it has the higher total utility. c. Which option should she pursue if the probability of finding a restaurant venue in a suburban area can be reliably estimated as 0.7 and in a metropolitan area as 0.3? Describe your reasoning and show your calculations. -If the probability of finding a restaurant in a suburban area estimates to be .7 versus finding one in a metropolitan area being .3 you would then calculate the expected utility for both businesses which would calculate as the probability of finding a business multiplied by the total utility in each business. This would appear below as for both
Image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern