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Suppose in Baltimore there are two different internetproviders: Provider A and Provider B. Consider the following information about a consumer named Ted: Ted has the

Suppose in Baltimore there are two different internetproviders: Provider A and Provider B. Consider the following information about a consumer named Ted:

  • Ted has the same demand equation for internetregardless of which company he uses(e.g. P = 100 - Q).
  • No matter which company he chooses, he pays the sameaverageprice at both providers (e.g. P =20).
  • However, he ultimately consumes two different quantities depending on whether he uses Provider A or Provider B.How is this possible?

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