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The Phone Network Says It Loses Money on Local Calls

Question 201

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The phone network says it loses money on local calls, because the $20 average monthly bill does not cover its average cost of $30.It estimates that $18 of costs are directly related to local service, with $12 the share from overall expenses (overhead).Why would the phone network be willing to operate if it is losing money?

Correct Answer:

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The phone company would save $18 in cost...

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