Question

8. Suppose the following table reflects the total satisfaction derived from consumption of pizza slices and Pepsis. Assume that pizza costs $1 per slice and a large Pepsi costs $2. With $20 to spend, what consumption mix will maximize satisfaction? Quantity consumed 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Total units of pleasure from pizza slices Total units of pleasure from Pepsis 47 92 132 166 196 224 251 271 288 303 313 315 312 300 111 200 272 336 386 426 452 456 444 408 340 217 92 -17

Answer 1

IN ABOVE TABLE

CONSUMER MIX WILL MAXIMIZE SATISFACTION

When consumer consumes 8 unit of pleasure from pizza slices and gains 271 satisfaction level from $8

and consumes 6 unit of pleasure from Pepsis and gain 426 satisfaction level from $12

and total satisfaction gain from $20 is 697 it is maximum satisfaction level consumer can attain from $20 and give satisfaction level from Pepsi and pizza slices.