Question

A cell phone provider offers a plan that costs ​$40 per month plus ​$0.20 per text message sent or received. A comparable plan costs ​$70 per month but offers unlimited text messaging.

Answer 1

For, 250 messages the plans cost the same. Under 250 messages, plan A is cheaper.

Explanation:

Giving the following information:

Plan A:

Fixed costs= $40

Variable cost= $0.2

Plan B:

Fixed cost= $40

I assume that we have to determine the indifference point, where the two plans cost the same.

First, we need to establish the total cost equations

Plan A= 20 + 0.2x

Plan B= 70

x= number of messages

Now, we equal both formulas and isolate x:

20 + 0.2x = 70

0.2x= 50

x= 250

For, 250 messages the plans cost the same. Under 250 messages, plan A is cheaper.