Business, 12.11.2019 05:31, olgapagan1010
Afriend of yours is considering two cell phone service providers. provider a charges $110 per month for the service regardless of the number of phone calls made. provider b does not have a fixed service fee but instead charges $1 per minute for calls. your friend's monthly demand for minutes of calling is given by the equation qd=100-20p, where p is the price of a minute.
with provider a, the cost of an extra minute is $ . with provider b, the cost of an extra minute is $ .
given your friend's demand for minutes and the cost of an extra minute with each provider, if your friend used provider a, he would talk for minutes, and if he used provider b, he would talk for minutes. this means your friend would pay $ for service with provider a and $ for service with provider b.
your friend would obtain $ in consumer surplus with provider a and $ in consumer surplus with provider b.
given this information, which provider would you recommend that your friend choose?
provider a
provider b
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Afriend of yours is considering two cell phone service providers. provider a charges $110 per month...
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