What baskets might he purchase if plan b is better for him

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Reference no: EM131247193

Darrell has a monthly income of $60. He spends this money making telephone calls home (measured in minutes of calls) and on other goods. His mobile phone company offers him two plans:

• Plan A: Pay no monthly fee and make calls for $0.50 per minute.

• Plan B: Pay a $20 monthly fee and make calls for $0.20 per minute.

Graph Darrell's budget constraint under each of the two plans. If Plan A is better for him, what is the set of baskets he may purchase if his behavior is consistent with utility maximization? What baskets might he purchase if Plan B is better for him?

Reference no: EM131247193

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