Answer to Question #155583 in Microeconomics for Sakshi Sinha

Question

You like the movie “Tumbbad” and want to visit the movie as many times 

as possible. The total satisfaction derived from watching movie is given in the

following table.

No of times 

watch the 

Movie

1st 2nd 3rd 4th 5th 6th

Total 

Satisfaction 400 700 950 1170 1270 1300

If the cost of watching movie each time is Rs. 220/-, then how many times 

you will watch theMovie?

Answer 1

I would go for the movie once because of the benefit to cost ratio.

$Customer Value = satisfaction/cost$

$400÷220=1.82$

The largest customer value is obtained in the first round