TELECOMMUNICATION EXTERNAL ECONOMIES,CITY SIZE AND OPTIMAL PRICING FOR TELECOMMUNICATIONS* |
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Authors: | John M Tofflemire |
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Abstract: | ABSTRACT. In this paper I make use of a city systems model to examine how telecommunications may affect cities in urban systems. The model offers an explanation for the observation that the share of employment in the communication-intensive producer-service sector increases with city size in the U.S. I suggest that external scale economies associated with metropolitan employment size, telecommunication network size and total number of intrametropolitan telecommunication contacts are possible explanations for this observation. I go on to suggest that the presence of telecommunication size and contact level external scale economies at the metropolitan level affects the optimal price that should be charged for local telecommunication services. |
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