In the first half of the twentieth century, AT&T had a near monopoly on local and long distance phone service. The firm charged a price for local telephone services that was roughly one-half of its cost of providing the services. In contrast, it charged almost two times it cost for long distance services. Why do you think AT&T adopted this pricing strategy?
Briefly explain why a used recreational vehicle (RV) that is only six months old and has been driven only 10,000 miles typically depreciates and costs at least 20 percent less than a new RV with the same options. Use pricing strategy and managerial economics to support your answer.© BrainMass Inc. brainmass.com October 25, 2018, 4:50 am ad1c9bdddf
AT&T adopted the strategy as a means of cross subsidization. Cross subsidization is a pricing strategy where the company charges higher prices to one group (the long distance customers) in order to charge low prices to a second group (the local phone customers). Another example other than AT&T of this practice would be the banking industry, where its common for a bank to charge high account fees to a specific group of customers (those who don't meet minimum balance requirements), and to not charge fees, or charge lower fees to another group (those who keep a minimum balance in the accounts). Specifically with ...
The solution provides a detailed discussion of why AT&T adopted their pricing strategy. This solution also discusses why a used recreational vehicle (RV) typically depreciates and costs at least 20 percent less than a new RV with the same options.
Characteristics of Real Change Leaders
The article, Real Change Leaders, discusses a study that explores what makes Real Change Leaders (Reclus) stand out from traditional middle managers.
Discuss 3 characteristics of Reclus covered in the article and your recommendation on what is needed to cultivate these characteristics in your workplace.
Please reference your ideas taken from the article.View Full Posting Details