Is the cellular carriers elasticity of demand elastic

Reference no: EM13221584

1. There is a stretch of I-81 in Virginia where there is a single cellular carrier that has roaming charges for any cell phone calls made in its territory. It is the only cellular carrier in that territory, and it is confident that no other cellular carrier can enter its territory for several more years. The cellular carrier has estimated its elasticity of demand for airtime minutes subject to roaming charges is 0.90.

a. Is the cellular carrier's elasticity of demand elastic, inelastic, or unitary elastic?

b. To increase its revenue, do you think that the cellular carrier should increase its roaming charge, decrease it, or keep the same?

Reference no: EM13221584

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