How do you get the supply and demand curves from this problem?

timer Asked: May 11th, 2015

Question description

Many software companies, after years of providing unlimited free telephone technical support for their products, began to charge for these services (typically after an initial start-up period of 90 days). Most companies offer two pricing plans. Suppose, for instance, Lotus Development offers users of their spreadsheet software the option of paying either (i) $2.00 per minute for telephone support or (ii) a $129 flat charge for a year of unlimited toll-free calls. Consider a customer with a yearly demand for service support of P = 11 – 0.1Q, where P is the price per minute and Q is the number of minutes of calls made per year. How many calls would this customer make under plan (i)? How many calls would he or she make under plan (ii)? Calculate the consumer surplus for each of the plans (i) and (ii). 

Tutor Answer

(Top Tutor) Studypool Tutor
School: UC Berkeley
Studypool has helped 1,244,100 students
flag Report DMCA
Similar Questions
Hot Questions
Related Tags

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors