A real estate agent is considering changing her land line phone plan. There are three plans to choose from, all of which involve a monthly service charge of $20. Plan A has a cost of $.38 a minute for daytime calls and $.17 a minute for evening calls. Plan B has a charge of $.47 a minute for daytime calls and $.14 a minute for evening calls. Plan C has a flat rate of $75 with 275 minutes of calls allowed per month and a charge of $.36 per minute beyond that, day or evening. a. Determine the total charge under each plan for this case: 120 minutes of day calls and 40 minutes of evening calls in a month. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is not complete. Cost for Plan A Cost for Plan B Cost for Plan C 63.40 X b. If the agent will only use the service for daytime calls, over what range of call minutes will each plan be optimal? (Round each answer to the nearest whole number. Include the indifference point itself in each answer.) Plan A is optimal from zero to minutes. Plan C is optimal from c. Suppose that the agent expects both daytime and evening calls. At what point (i.e., percentage of total call minutes used for daytime calls) would she be indifferent between plans A and B? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places. Omit the "%" sign in your response.)

Practical Management Science
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Author:WINSTON, Wayne L.
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Point of indifference
percent daytime minutes
Transcribed Image Text:Point of indifference percent daytime minutes
A real estate agent is considering changing her land line
phone plan. There are three plans to choose from, all of
which involve a monthly service charge of $20. Plan A has
a cost of $.38 a minute for daytime calls and $.17 a minute
for evening calls. Plan B has a charge of $.47 a minute for
daytime calls and $.14 a minute for evening calls. Plan C
has a flat rate of $75 with 275 minutes of calls allowed per
month and a charge of $.36 per minute beyond that, day
or evening.
a. Determine the total charge under each plan for this
case: 120 minutes of day calls and 40 minutes of evening
calls in a month. (Do not round intermediate calculations.
Round your answer to 2 decimal places.)
Answer is not complete.
Cost for Plan A
Cost for Plan B
Cost for Plan C
$
Return to question
63.40
b. If the agent will only use the service for daytime calls,
over what range of call minutes will each plan be optimal?
(Round each answer to the nearest whole number.
Include the indifference point itself in each answer.)
Plan A is optimal from zero to
minutes. Plan C is optimal from
c. Suppose that the agent expects both daytime and
evening calls. At what point (i.e., percentage of total call
minutes used for daytime calls) would she be indifferent
between plans A and B? (Do not round intermediate
calculations. Enter your answer as a percentage
rounded to 2 decimal places. Omit the "%" sign in your
response.)
Transcribed Image Text:A real estate agent is considering changing her land line phone plan. There are three plans to choose from, all of which involve a monthly service charge of $20. Plan A has a cost of $.38 a minute for daytime calls and $.17 a minute for evening calls. Plan B has a charge of $.47 a minute for daytime calls and $.14 a minute for evening calls. Plan C has a flat rate of $75 with 275 minutes of calls allowed per month and a charge of $.36 per minute beyond that, day or evening. a. Determine the total charge under each plan for this case: 120 minutes of day calls and 40 minutes of evening calls in a month. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is not complete. Cost for Plan A Cost for Plan B Cost for Plan C $ Return to question 63.40 b. If the agent will only use the service for daytime calls, over what range of call minutes will each plan be optimal? (Round each answer to the nearest whole number. Include the indifference point itself in each answer.) Plan A is optimal from zero to minutes. Plan C is optimal from c. Suppose that the agent expects both daytime and evening calls. At what point (i.e., percentage of total call minutes used for daytime calls) would she be indifferent between plans A and B? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places. Omit the "%" sign in your response.)
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