Q1. Budweiser, Miller and Coors, who together produce 80% of all beer consumed in the US, each spend well over $250 million a year on television advertising battle also promoting their beer brands. Evidently if one firm is advertising its brands heavily where others must also advertise to defend their market shares.

Q2. Assume Caesar allocates his entire budget to the purchase of chips as well as soft drinks. The marginal utility of the last bottle of soft drink purchased is 12 utils and each bottle costs $1.20. The marginal utility of the last bag of chips purchased is 8 utils and each bag costs $1.Explain in order to maximize his utility.