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## ECON 103 UWM Michcongan Telecom Consumer Surplus for Plans Exercise Worksheet

### Question Description

I’m working on a economics test / quiz prep and need an explanation to help me learn.

Question 1. [40 points] Suppose Michcongan Telecom offers its users the option of paying either (a) \$2.00 per minute for telephone service or (b) a \$125 flat charge for a year of unlimited toll-free calls. Consider a customer with an annual demand for telephone service of P = 11  0.1Q, where P is the price per minute and Q is the number of minutes of calls made per year. Calculate the consumer surplus for each of the plans (a) and (b).

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