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Executive MBA Managerial Economics NYNEX Case Reference : Casenet "Pricing NY Telephone Private Line Services" Introduction: NYNEX has held a significant share of the market in the New York and Boston downtown areas. The company has been able to maintain a much lower cost per private line than the competitor, Teleport (only $40/month per line). However, Teleport has instituted an aggressive pricing strategy that is currently eroding the NYNEX customer base in these cities. One option to combat this lose of customer base would be for NYNEX to reduce rates for private line. Exhibit 1 of the Casenet writeup show the potential demand based on price in the high density areas of New York and Boston. The major drawback of this approach is that due to regulations NYNEX must offer the same pricing in low density areas that it does in the high density areas. NYNEX currently is anticipating 20000 lines in low density...

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