Suppose that the agent expects both daytime and evening, Ask an Expert

Management Studies

A real estate agent is considering changing her cell phone plan. There are 3 plans to choose from all which have a montly service fee of $20. Plan A has a rate of $.45 cents for daytime min and $.20 for evening. Plan B $.55 day and $.15 evening. Plan C has a flat rate of $80 for 200 minutes of calls and a charge of $.40 beyond that 200 if either day or night.

Question: Suppose that the agent expects both daytime and evening calls. At what point (ie percentage of call minutes for daytime calls) would she be indifferent between plans A and B?

The book answer says 1/3 for day and I have no clue what is happening mathematically since I set both equations to eachother and keep getting 1/2.
Someone please explain or show visually?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M9346270

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