Explore BrainMass

Explore BrainMass

    Economics - Consumer Surplus

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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.

    © BrainMass Inc. brainmass.com October 9, 2019, 9:42 pm ad1c9bdddf

    Solution Preview

    Consumer Surplus is defined as the area under the demand curve but above the price line.

    In other words, consumer surplus = ...

    Solution Summary

    The expert examines the consumer surplus in economics.Neat, step-wise solution is provided.