Micro problem 1

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Micro problem 1

kashish
Mr.A has Rs.5000/- to spend on advertising in a print media .There are two magazines in which the print ads can be placed x1 and x2.Ads in x1 and x2 will cost Rs.500 per ad and Rs.250 per ad respectively .There are two types of readers: Type B and Type C
Each ad in x1 magazine is read by 1000 type B readers and 300 type C readers.
It is known fact that nobody reads more than one ad and nobody who reads one magazine reads the other.

1. If Mr.A spends all his income on magazine x1,then  how many readers of type B and type C  will read the ad???

pl. solve it and explain it .
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Re: Micro problem 1

Sumit
question is little confusing: If Mr.A spending all his income on Magazine x1...then Max ad he can give in X1 is 10.
ACC to me: 1)If we assume that all the ads are different but of same thing then the the readers of ads will be 10000 type B and 3000 type C.
2) If we assume that all the ads given by Mr.A in Magazine x are same then the reader of ad will be 1000 type B and 300 type C.

P.S: I Could not get the point of giving X2 magazine & cost of placing ad in it...If he has to place all its money in magazine X1.
M.A Economics
Delhi School of Economics
2013-15
Email Id:sumit.sharmagi@gmail.com
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Re: Micro problem 1

kashish
Hi thanx for solving it actually i was facing the same problem.Its varian workbook Q. from budget constraint it was in continuation to other 2 parts so i had to write it full.