Gamma Electronics (GE), a customer of AT&T, would place 90 calls per month if AT&T charges a flat rate of $0.90 per phone call and 100 calls per month if AT&T charges a flat rate of $0.80 per phone call. Calculate GE’s consumer surplus, assuming linear demand, if AT&T charges $1.00 per call for the first 60 calls, $.80 per call for the next 40 calls, and $.50 per call for all remaining calls.
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