Question: Problem 4 . 7 ( 2 points ) : Non - linear Utility The assumption of a linear relationship between a product's features and its
Problem points: Nonlinear Utility
The assumption of a linear relationship between a product's features and its utility has its limitations For instance, consider a scenario where the partworth parameter for the "screen size" of a phone is positive. This would sugges that increasing the screen size makes customers more likely to buy the phone. However, this assumption breaks down if the screen size becomes excessively large such as inches, which is bigger than most laptops. Clearly, customers would not be interested in such a phone. How would you address the nonlinear relationship between utility and product features in such cases?
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