A friend of yours is considering two cell phone service

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Reference no: EM13353067

A friend of yours is considering two cell phone service providers. Provider A costing $120 / month for the services 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 50, where p is the price of a minute. Then,150 Q P

a. With each provider, elucidate the price to your friend of an extra minute on the phone?

b. In light of your answer to (a), how many minutes would your friend talk on phone with each provider?

c. How much would be end up paying each provider every month?

d. How much consumer surplus would be obtained with each provider?

e. Explain why your friend chooses the provider which you recommend?

Reference no: EM13353067

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