Microeconomics 2nd Edition by Douglas Bernheim

Exercise 2

Suppose the wireless telephone monopolist in worked-out problem 18.1 (page 671) charges 40 cents per minute. How large a fixed fee can it charge and still persuade consumers to buy What is its profit from each consumer Its total profit How does its total profit compare to its profit with a per-minute charge of 10, 20, and 30 cents per minute