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Find the break-even level of total duration

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Reference no: EM132882276

Problem - You are a manager of a telephone service provider in Sydney. You have two plans for your customers as follows:

Plan 1: Bill = 15 + 0.05 T; and

Plan 2: Bill = 25 + 0.03T.

Where, 'Bill' is your monthly bill in dollars and *T' is your monthly total duration of calls in minutes.

(a) Find the break-even level of total duration of monthly telephone calls in minutes.

(b) If your customer's average monthly duration of call is 400 minutes, advise which plan would be suitable for your customer?

(c) If your customer's average monthly duration of call is 600 minutes, advise which plan would be suitable for this customer?

(d) If there is a $5 reduction in the monthly fixed fee in Plan 2, then what would be your advice to the customer whose average monthly call is 400 minutes?

Reference no: EM132882276

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