Solve the Problem. -Using a Phone Card to Make a Long Distance Call

question 32

Multiple Choice

Solve the problem.
-Using a phone card to make a long distance call costs a flat fee of $0.85 plus per $0.19 minute starting with the first minute. Find the total cost of a phone call which lasts 8 minutes.

• A) $6.00
• B) $1.52
• C) $2.37
• D) $8.16

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Definitions:

Natural Monopoly

A market condition where a single firm can supply a good or service to an entire market more efficiently than if there were multiple suppliers, due to high fixed or startup costs.

Investor Owned

Pertains to a business or entity that is privately owned by investors who seek to earn profits from the operation.

Barriers to Entry

Barriers that make it difficult for new entrants to join a market due to financial, legal, or procedural hurdles.

Economic Profit

The distinction in totality between incomes and costs, inclusive of both transparent and concealed expenses.