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Unformatted text preview: the cost of seeing the playat the moment each must decideis exactly $10. Many people seem to feel that in the case of the lost ticket, the cost of seeing the play is not $10 but $20, the price of two tickets. In terms of the financial consequences, however, the loss of a ticket is clearly no different from the loss of a $10 bill. In each case, the question is whether seeing the play is worth spending $10. If it is worth $10 to see the play, you should see it; otherwise you should not attend the performance. Whichever your answer, it must be the same in both cases. 9. For a seven-minute call the two phone systems charge exactly the same amount, 70 cents. But at that point under the new plan, the marginal cost is only 2 cents per minute, compared to 10 cents per minute under the current plan. And since the benefit of talking additional minutes is the same under the two plans, Tom will make longer calls under the new plan....
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This note was uploaded on 04/19/2011 for the course ECON 312 taught by Professor Brown during the Spring '11 term at Atlantic PR.
- Spring '11