Before the Deregulation in Telecommunications,AT&T Charged Higher Rates on Long-Distance

question 131

Multiple Choice

Before the deregulation in telecommunications,AT&T charged higher rates on long-distance service in order to make local service rates lower.Such a practice is an example of

• A)Price discrimination because different prices were charged for the same service.
• B)The pricing of public goods.
• C)Cross-subsidization of local phone service.
• D)Predatory price cutting to eliminate local telephone companies.

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Definitions:

Cost Behavior

The study of how the costs of a business change in relation to changes in its activity levels or volume.

Cost Behavior Analysis

The study of how costs change in relation to changes in a firm’s level of activity.

Mixed Cost

An expense that contains both variable and fixed cost components.

Car Rental

The process of temporarily using a vehicle for a period, typically ranging from a few hours to weeks, against a fee.