Conjoint analysis is performed to determine how a college student’s evaluation o
ID: 3277958 • Letter: C
Question
Conjoint analysis is performed to determine how a college student’s evaluation of an electric car depends on two attributes of the car: X1: Range (the number of miles one can drive the car after a full charge): 200 miles to 400 miles X2: Charging time: 6 hours to 24 hours It is assumed that a college student’s rating of an electric car on a 0-100 (very poor to excellent) scale can be expressed as: U(X1, X2) = U0 + U1 (X1) + U2 (X2), where U1 (200) = 0, U2(6) = 0, and a higher score means the student likes the product better. Suppose, for a given student: U0 = 60 U1 (200) = 0 U1 (300) = 24 U1 (400) = 40 U2 (6) = 0 U2 (12) = – 15 U2 (24) = – 60 Which of the following two cars will this student prefer? Car 1: X1 = 250, X2 = 10 Car 2: X1 = 375, X2 = 20
Explanation / Answer
Car1 - number of miles that can be driven when fully charged = 250
Time required for full charge = 10 hours
Car2 - number of miles that can be driven when fully charged = 375
Time required for full charge = 20 hours