Chapter6: Demand Relationships Among Goods
Section: Chapter Questions
Problem 6.4P
Related questions
Question
100%
![5.00
4.50
Demand
4.00
3.50
Triangle
3.00
2.50
200
1.50
100
0.50
40
80
100
120
140
180
180
200
Quantity of Minutes
Your friend would obtain S
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?
O Provider A
O Provider B
Price of Minutes
20](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F795e60d9-3b88-497f-9ce1-b8440a91a1ae%2Fc13e832f-db8b-44c3-a929-9bf6a0b7a1e7%2Fqkejbd7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:5.00
4.50
Demand
4.00
3.50
Triangle
3.00
2.50
200
1.50
100
0.50
40
80
100
120
140
180
180
200
Quantity of Minutes
Your friend would obtain S
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?
O Provider A
O Provider B
Price of Minutes
20
![A friend of yours is considering two cell phone service providers. Provider A charges $120 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 Qp = 150 - 50P, 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 S
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 S
for service with Provider A and S
for service with Provider B.
Use the following graph to draw your friend's demand curve for minutes. Then use the green triangle to help you answer the questions that follow.
Note: Yo U will not be graded on an. changeS Vou mako to tha
喜G](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F795e60d9-3b88-497f-9ce1-b8440a91a1ae%2Fc13e832f-db8b-44c3-a929-9bf6a0b7a1e7%2F3xqc9k7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A friend of yours is considering two cell phone service providers. Provider A charges $120 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 Qp = 150 - 50P, 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 S
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 S
for service with Provider A and S
for service with Provider B.
Use the following graph to draw your friend's demand curve for minutes. Then use the green triangle to help you answer the questions that follow.
Note: Yo U will not be graded on an. changeS Vou mako to tha
喜G
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