A salesperson introduces a mobile-data plan to Michael, which allows him to pay HK$200 per month and enjoy 20G of data usage. Michael said he is happy with the plan and is willing to subscribe to it. Note that Michael will use more than 20G of data when it is free-of-charge. Explain the above Michael's decision by using a graph/graphs based on the concept of marginal utility/happiness, consumer surplus and marginal cost.

A salesperson introduces a mobile-data plan to Michael, which allows him to pay HK$200 per month and enjoy 20G of data usage. Michael said he is happy with the plan and is willing to subscribe to it. Note that Michael will use more than 20G of data when it is free-of-charge. Explain the above Michael's decision by using a graph/graphs based on the concept of marginal utility/happiness, consumer surplus and marginal cost.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter10: Consumer Choice Theory

Section: Chapter Questions

Problem 5P

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