Question
A phone company has many different mobile phone plans. They have two general types of phone plans: BYO phone (where the customer provides their own
A phone company has many different mobile phone plans. They have two general types of phone plans: BYO phone (where the customer provides their own mobile phone) and Mobiles on a Plan (where Telstra provides the mobile as well as the calls, texts and data). Assume existing customers are NOT able to substitute (or switch) from one plan to another (ie: they are locked in). Telstra then decides to raise the price of its BYO phone plan.
1. The quantity demanded of BYO phone plans will increase.
2. The demand for Mobiles on a Plan will increase and the quantity demanded of BYO phones will decrease.
3. The demand for Mobiles on a Plan will shift to the left due to the increase in price of BYO phone plans.
Which of the above statements are true?
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