Why do firms proposal such confusing plans

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Reference no: EM1376888

The following cell-phone offer by Sprint is characteristic of what one can get on a cell phone plan: 4,000 free minutes for $39.99 a month. The fine print speaks that only 350 of those minutes are anytime minutes the residual are restricted to evening and weekend usage. If you go over your selected time you are charged 35 cents per minute for any additional minutes.

A) What is your marginal cost?

B) What would your average variable cost curve for peak time usage look like?

C) If you don't keep track of your utilization how would you figure your marginal cost?

D) Why do firms proposal such confusing plans?

E) Were firms that charged this way in favour of or against portability of phone numbers?

Reference no: EM1376888

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