Why+your+cell+phone+bill+is+going+up+by+Terence+Lau

//**REMEMBER: DO NOT SUMMARIZE THE ARTICLE!!!**//

=TITLE OF EXTRACT:= Why is your cell phone bill going up

=SOURCE:= []

=DATE EXTRACT WAS WRITTEN:= Feb 23rd, 2012

=DATE CURRENT EVENT WAS WRITTEN:= Mar 6th, 2012

=EXPLANATION OF THE ECONOMIC THEORY RELATED TO THE ARTICLE:= The reason behind the soaring increase of wireless data service in mobile network companies is because of the amount of demand coming from consumers. The law of demand states, as price of a product increases, demand decreases, as price of a product decreases, demand increases. The cost of wireless data has always been low, therefore the demand has been high. Because of the big demand caused by a low cost, there is a shortage in wireless data, mobile companies are finding it hard to maintain service without upgrading network technology or acquiring more wireless spectrum. Since companies are paying more total cost, the phone bills have been going up to increase revenue.

=VOCABULARY TERMS AND DEFINITIONS:= > > >
 * Consumer - a person or group of people that are the final users of products generated within a social system
 * Revenue - Income that a company receives from its normal business activities
 * Average Total Cost - Total cost per unit of output
 * Consumption - Use of final goods by a consumer until disposal
 * Demand - the amount of a good or service that consumers are willing and able to buy at a given price
 * Supply - the amount of a good or service people or businesses are willing and able to provide at a given price
 * Law of Demand - As price of a product increases, demand decreases; as price of a product decreases, demand increases
 * Shortage - a disparity between the amount demanded for a product or service and the amount supplied in a market

=DIAGRAMS:=

=EVALUATION:=

The reason behind the dramatic increasing of wireless data price is because of plans introduced by network companies. These wireless data plan are in place to help increase consumer demand, and to boost revenue earned. Because of the popularity of these plans that allows consumers to pay a certain amount of money and use unlimited amount of wireless data, the amount of demand for wireless data had exceeded the amount that the network companies can handled. Therefore there is a shortage of wireless data. A choice to keep up with the demand is to upgrade or increase network spectrum. Both costs billions of dollars. AT&T network company decided to upgrade their network by spending 95 millions of dollars, following the billion dollar investments, Verizon paid a 3.5 billions for a small but tactically significant bundle of spectrum. These increase in cost are directed back to the consumers, who are ultimately paying for all these upgrades.