Consumers are frequently bewildered by the distinct array of choices, plans and prices which are offered by companies offering cell phone service. Describe in terms of consumer surplus why it makes sense from both the company's perspective and that of the consumer.
Consumers all contain different ability and ready to pay. If companies knew what the willingness to pay was for any specific consumer it would merely charge them the highest price which they could get away with. The truth is that this willingness to pay is just known by the consumer. If only one plan & price were offered several consumers may elect to subscribe to cell phone service and several may not. By offering distinct plans and prices it allows consumers to be capable to choose the plan that gives them the greatest amount of consumer surplus. This in turn let the firm to serve more customers & to make more profit.