Imagine you have a movie streaming platform that offers new movies at the time of release. Your market research has revealed the following about your typical consumers’ satisfaction from watching movies:Number of movies (per month)Total Utility or Satisfaction001252473664825946105The maximum number of movies the consumer watches in a month is 6.(a) Construct a third column for this table to derive “Marginal Utility” corresponding to the number of movies watched. Explain in words what this concept means and why it is important to derive the marginal utilities in pricing.

Marginal utility is the additional utility derived from consuming an additional unit of the good.

Answered: Imagine you have a movie streaming…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Imagine you have a movie streaming platform that offers new movies at the time of release. Your market research has revealed the following about your typical consumers’ satisfaction from watching movies:

Number of movies (per month)	Total Utility or Satisfaction
0	0
1	25
2	47
3	66
4	82
5	94
6	105

The maximum number of movies the consumer watches in a month is 6.

(a) Construct a third column for this table to derive “Marginal Utility” corresponding to the number of movies watched. Explain in words what this concept means and why it is important to derive the marginal utilities in pricing.

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