Costs, Tariffs, and Telecoms

Pricing issues in economic theory are almost always presented in terms of theoretical concepts such a marginal costs and marginal revenues. Never mind that most managers of companies, large and small, have hardly ever seen a marginal cost and probably wouldn’t recognize it if it came and sat on their desk one morning smoking a cigar. The fact is, many costs are common or joint costs, and dividing costs between different services becomes not just very difficult to measure, but conceptually almost arbitrary.

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Photo by Mika Baumeister