What is your maximum consumer surplus if you accept the deal

Reference no: EM13182462

Imagine cell phones are simple and the only thing consumers care about is minutes. Suppose a monopolist wireless company says, \The cell phone and the first 6 minutes are free, and the price of each additional minute is $2."

Now suppose your demand for minutes is

q(p) = 10 - p

Now suppose the wireless company changes its pricing policy and says, "Asign-up fee of $50 will get you a phone and up to 6 minutes of talk time. The price for each additional minute is $2." (NOTE: This is slightly dierent from the simpler two-part taris we have looked at in class, because price is not a straight line, as shown above, but the same principles should apply.) What is your maximum consumer surplus if you accept the deal? Will you accept it?

Reference no: EM13182462

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