When the old AT&T had a virtual monopoly on long distance service, it created a rate structure that had high prices M-F 8 am to 5 pm, medium prices M-F 5:01 pm – 11 pm, and low prices M-F 11:01 pm -7:59 am and all-day weekends and holidays. How might the differences in elasticities for business phone users and household phone users explain this rate structure?

When the old AT&T had a virtual monopoly on long distance service, it created a rate structure that had high prices M-F 8 am to 5 pm, medium prices M-F 5:01 pm – 11 pm, and low prices M-F 11:01 pm -7:59 am and all-day weekends and holidays. How might the differences in elasticities for business phone users and household phone users explain this rate structure?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter11: Monopoly And Antitrust Policy

Section: Chapter Questions

Problem 7SCQ: From the graph you drew to answer Exercise 11.6, would you say this transit system is a natural...

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