week 2 assignment marketing class.docx

# Price would be multiplied by 15 being that it is half

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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

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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
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