AT&T said it will eliminate its $30 unlimited data plan as the crush of data use from the iPhone has hurt call quality. AT&T is introducing new plans costing $15 a month for 200 megabytes of data traffic or $25 a month for 2 gigabytes. AT&T says those who exceed 2 gigabytes of usage will pay $10 a month for each additional gigabyte. AT&T hopes that these plans will attract more customers.
a. Explain why AT&T’s new plans might be price discrimination.
b. Draw a graph to illustrate the original plan and the new plans.