Problem
Recently, an Internet service provider in the UK implemented a "no-strings US-style flat-rate plan" whereby its subscribers receive unlimited dial-up Internet access for a flat monthly fee of E14.99. Under the old "metered plan," Alistair Willoughby Cook spent 1.499 minutes online and paid E14.99 in usage fees in a typical 30-day month. If all customers are exactly like Alistair, what is the impact of the flat-rate plan on consumer welfare and the company's profits? Explain.