Ever since the Indian government opened up its telecom industry to competition in 1999, Indian consumers have seen their phone bills shrink. In 2000, the charge for making a call with a cellular phone was 16 rupees per minute (about 27 U.S. cents) By 2011 that rate had fallen to 1 paisa per second-roughly 1 cent per minute. In the same time period, the number of mobile subscribers skyrocketed from 2 million to 584 million. Today, there are 930 million cellular subscribers, making India the world's second largest mobile phone market. How did all this come about? India opened the telecom market to new entrants,reduced license fees, and lowered tariffs, encouraging dozens of firms to complete for India telephone customers. (A) by what percentage did the price of a phone minute decline after competition emerged? (B) By what percentage did the quantity demanded increase? (C) what was the apparent price elasticity of demand?

Ever since the Indian government opened up its telecom industry to competition in 1999, Indian consumers have seen their phone bills shrink. In 2000, the charge for making a call with a cellular phone was 16 rupees per minute (about 27 U.S. cents) By 2011 that rate had fallen to 1 paisa per second-roughly 1 cent per minute. In the same time period, the number of mobile subscribers skyrocketed from 2 million to 584 million. Today, there are 930 million cellular subscribers, making India the world's second largest mobile phone market. How did all this come about? India opened the telecom market to new entrants,reduced license fees, and lowered tariffs, encouraging dozens of firms to complete for India telephone customers. (A) by what percentage did the price of a phone minute decline after competition emerged? (B) By what percentage did the quantity demanded increase? (C) what was the apparent price elasticity of demand?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter20: Elasticity: Demand And Supply

Section: Chapter Questions

Problem 10E

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