Always There Wireless Is Wireless Monopolist in a Rural Area

question 48

Multiple Choice

Always There Wireless is wireless monopolist in a rural area.There are 200 customers,each of whom has a monthly demand curve for wireless minutes of Q^d = 200 - 100P,where P is the per-minute price in dollars and Q is the number of wireless minutes.The marginal cost of providing the wireless service is $0.25 per minute.If Always There charges $0.50 per minute and the largest fixed fee that it can at that price,what is the difference in profit per customer compared to when it charges $0.25 per minute and the largest fixed fee that it can at that price?

• A) Profit per customer is the same in both cases, and it is equal to zero.
• B) Profit per customer is the same in both cases, and it is positive.
• C) Profit is $3.13 per customer higher at a price of $0.50.
• D) Profit is $3.13 per customer higher at a price of $0.25.

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