The percentage of wireless-only households was 6% last year,an increase over the previous year.But the increase isn't as large or as dramatic as experts predicted it would be.Consumers are discovering that it's handy to keep a landline in the home,as

The percentage of wireless-only households was 6% last year,an increase over the previous year.But the increase isn't as large or as dramatic as experts predicted it would be.Consumers are discovering that it's handy to keep a landline in the home,as
The percentage of wireless-only households was 6% last year,an increase over the previous year.But the increase isn't as large or as dramatic as experts predicted it would be.
Consumers are discovering that it's handy to keep a landline in the home,as cellular phone service may be spotty,Internet usage still requires a telephone line in some cases,and it is impossible to use up minutes on a regular telephone.
Many people who indicated that they would switch from a regular telephone to a cellular phone for their primary phone,but then failed to follow through.A research firm found that only 25% of those who indicated as such actually did convert to a wireless-only phone.
Demographics play a significant role in this.Many people keep a land-line telephone in the home because there was always a land-line telephone in their home growing up.A significant percentage of wireless-only households are younger,though people who never had regular telephone service.This will have a much more serious effect on regular telephone service than the introduction of the cellular phone itself.People who are accustomed to relying on their cell phone for all of their needs may never require the use of a regular telephone.
Questions
1.What predicted relationship existed between landline phone and cellular phones?That is,what kind of goods were they expected to be?What kind of relationship in fact exists?
2.Why is there a difference between the predicted relationship and the actual outcome?What would you expect to happen over time to the price of telephone service?Why?Illustrate your answer with a graph of supply and demand.
3.Based on the information in this article,is demand for regular telephone service elastic or inelastic?Why?
4.If cell phone companies were to increase their prices,how will that affect the revenue for landline companies?Explain your answer.

The percentage of wireless-only households was 6% last year,an increase over the previous year.But the increase isn't as large or as dramatic as experts predicted it would be.Consumers are discovering that it's handy to keep a landline in the home,as
1.landline phone and cellular phone are substitude goods.Which means that when one thing inecrease its demand,the other good- responese to the increasing- is decreasing.In other words,it is a negative relationship.
2.As the market and the market environment remain the same for a long time,in the short term run,it is impossible for one new tech.having an stunning affect on the entire market.As time pass by,the price of telephone service will actually decrease,while due to the increasing use of the wire-less cellular phones.
The S&D graph will appear to the situation where demand curve shift to the left fot the regular phone.And the quantity demand decrease,while price fall.
3.Obviously,the demand fot regular telephone s serviece is inelastic.The reason is that still lots of people are using the regular one though the new one has been introduced into the market.The demand still remain high.
4 As the demand is INELASTIC,then,an increase in price will increase the total revenue as the result.(you may draw a graph for this question to illustrate the situation,there is a adage that "a pic worth thousand words".so please use a pic to assist you.The most efficient way to solve economic question is to draw a pic.)
That is all~Enjoy the course.I am also studing it (AP MICROECNOMIC AND AP MACROECNOMIC) SO hopefull you will receive your own success.