Lin Jun's demand curve for mobile calling is a straight line. Two points of her demand curve are: (i) at a price if 1.29 puan per minute, a quantity of 0 minutes; and (ii) at a price of 0.29 yuan per minute, a quantity of 400 minutes. Draw her demand curve
Suppose that lin Jun subscribes to the 88 yuan per month plan. (i) How much calling time would she consume? (ii) What would be her total benefit?(iii) what would be her buyer surplus (benefit less charge)?
Replicate (b) assuming that Lin Jun subscribes to the 68 yuan per month plan. Note that she might decide to buy additional minutes beyond the free minutes.
Which plan should she choose to maximize buyer surplus?