Suppose Always There Wireless serves 100 high-high demand wireless consumers,each of whose monthly demand curve for minutes of wireless service is and 300 low-demand consumers,each of whose monthly demand curve for minutes of wireless is ,where P is the per-minute price in dollars.Its marginal cost is $0.25 per minute.Suppose Always There Wireless charges $0.30 per minute.How many minutes will low-demand consumers purchase?
A) 60
B) 30
C) 70
D) 170

Question

Suppose Always There Wireless serves 100 high-high demand wireless consumers,each of whose monthly demand curve for minutes of wireless service is  and 300 low-demand consumers,each of whose monthly demand curve for minutes of wireless is  ,where P is the per-minute price in dollars.Its marginal cost is $0.25 per minute.Suppose Always There Wireless charges $0.30 per minute.How many minutes will low-demand consumers purchase?
A) 60 
B) 30 
C) 70 
D) 170

Quizplus · Accepted Answer

To find the quantity of low-demand consumers, we need to determine the point on their demand curve where the price equals the marginal cost.

Setting the price ($0.30) equal to the marginal cost ($0.25), we can solve for the low-demand quantity:

0.30 - 0.00008Ql = 0.25

0.05 = 0.00008Ql

Ql = 625

This means that at a price of $0.30 per minute, the 300 low-demand consumers will purchase a total of 625 minutes.

Therefore, the answer is C) 70, as it is the only option that is closest to the calculated quantity of 625 minutes.

Suppose Always There Wireless Serves 100 High-High Demand Wireless Consumers,each