Question
Please provide in details for the below questions.. In one of their pay-as-you-go plans, Virgin Mobile (sold locally at Best Buy or Target for example)
Please provide in details for the below questions..
In one of their pay-as-you-go plans, Virgin Mobile (sold locally at Best Buy or Target for example) promised that: - Your first 10 minutes each day cost 25 per minute - All minutes after that are just 10 per minute - That's it: no nights, weekends, special-once-in-a- blue-moon, peak/off peak, home calling, or long distance rates. And no contract to sign or fixed monthly plans or fees. (a) (13 points) Suppose that Helena's (inverse) demand for cell phone minutes per day is given by P = 15 - Q where P is in cents (that is P = 10 means the price is 10 cents), and Q is in minutes. How many minutes of cell phone calls would she use on each of those days if she were a Virgin customer? What would be the daily cost to her of those minutes? What would be her consumer surplus on each of these days? (Please show your work, and write your answers in the box provided.)
(b) Suppose that George travels a lot, and that his daily (inverse) demand for cell phone minutes is P = 45 - Q where P is in cents and Q is in minutes. How many minutes of cell phone calls would he use on each day if he were a Virgin Customer? What would be the daily cost to him of those minutes? What would be his daily consumer surplus? (Please show your work and write the answers in the box provided.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started