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Economics - Consumer Surplus

Suppose that telephone co. has hired you as a consultant to determine what price it should set for calling services. Suppose that an individuals' inverse demand for wireless services in the greater Atlanta area is estimated to be P = 100 - 33Q and the marginal cost of providing wireless services to the area is $1 per minute. Compute consumer surplus when the telephone co. charges an optimal two-part price.

A. $0

B. $74.25

C. $148.50

D. There is insufficient information to compute consumer surplus

Please show step/calculations.

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M927262

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