A local telephone company rents key phones (phones with several lines that come into a department office and which are capable of transferring calls to individual phones) for $100 per month. Business phones (phones in faculty offices are considered business phones) cost $45 per month. Residential phones (the category under which phones in dormitories and other campus housing fall) rent for $20 per month. In order to save money, the university purchased its own internal phone system. There are 150 key phones on campus, 700 faculty phones and 1,500 phones in campus housing. The monthly cost for operating the university’s phone system s $65,000.
Required:
How much would each user pay to rent a phone, if the cost is allocated using the Shapley method?
