Scenario 5-4 ​

question 53

Short Answer

Scenario 5-4
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Consider the markets for mobile and landline telephone service. Suppose that when the average income of residents of Plainville is $55,000 per year, the quantity demanded of landline telephone service is 12,500 and the quantity demanded of mobile service is 28,000. Suppose that when the price of mobile service rises from $100 to $120 per month, the quantity demanded of landline service decreases to 11,000. Suppose also that when the average income increases to $60,000, the quantity demanded of mobile service increases to 33,000.
-Refer to Scenario 5-6. Considering the income elasticity, what type of good is mobile telephone service?

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Definitions:

Perkins

Depending on the context, Perkins could refer to a person's last name, but in educational or cognitive theory contexts, it might relate to David Perkins, an educational theorist known for his work on intelligence and creativity.

Large Knowledge Base

A comprehensive collection of information, facts, and rules used in decision-making processes or computational systems.

Essential Structure

The fundamental or intrinsic architecture of an entity or concept, which determines its nature and characteristics.

Parallelogram

A parallelogram is a four-sided polygon with opposite sides that are parallel and equal in length, and opposite angles that are equal.