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Loyalist-Acadian Telephone, a crown corporation, provides telephone service to rural New Brunswick. In order to provide one unit of service at any time of day,

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Loyalist-Acadian Telephone, a crown corporation, provides telephone service to rural New Brunswick. In order to provide one unit of service at any time of day, the corporation must have one unit of fixed capital in place. Each unit of capital, which costs $3 per unit per day, must be paid for only once per day, although it can be used to provide service at various times during the day. However, each unit of capital can be used to provide only one unit of service at any particular instant in time. In addition, the provision of telephone service entails the use of a variable input, which costs $2 for each unit of service provided. This cost is incurred each time a unit of service is supplied. L-A Tel has identified two different time periods during which telephone service is used. The quantities of service demanded (daily) during these periods are 93'\" (P) = 500 - 25F, 93\"\" (P) = 300 - 2513 The government has imposed a break-even requirement on L-A Tel (total revenues from users must be sufficient to cover total costs). The newest member of the Board of Directors, Gabrielle Comeau, proposes that, "in the interest of fairness to all users," L-A Tel should charge the same, uniform, price for telephone service during all time periods. The newest member of the Board of Directors, Gabrielle Comeau, proposes that, "in the interest of fairness to all users," L-A Tel should charge the same, uniform, price for telephone service during all time periods. If the uniform price is chosen such that the firm's revenue is to equal its cost of providing the total quantity of service demanded at the uniform price, what will be the total surplus (this is all consumers' surplus) to all users combined? 0 1) Total Surplus at least $2,500 but less than $3,500 0 2) Total Surplus at least $3,500 but less than $4,500 0 3) Total Surplus at least $5,500 0 4) Total Surplus less than $2,500 0 5) Total Surplus at least $4,500 but less than $5,500

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