A friend of yours is considering two cell phone service providers. Provider A charges $120 per month for the service regardless of the number of phone calls made. Provider B does not have a fixed service fee but instead charges $1 per minute for calls. Your friend's monthly demand for minutes of calling is given by the equation QD= 150 - 50P, where P is the price of a minute.
a. With each provider, what is the cost to your friend of an extra minute on the phone?
b. how many minutes would your friend spend on the phone with each provider?
c. How much would he end up paying each provider every month?
d. How much consumer surplus would he obtain with each provider?
e. Which provider would you recommend that your friend choose?