Keywords
postal services, long-term average incremental cost, LRAIC, activity-based costing, ABC, predatory pricing, designated operator
Abstract
One of the key compliance issues relating to competition law for the designated postal operator is the pricing of its commercial services, which must not be perceived as predatory. Experience of the European Commission shows that the price will not be predatory if it covers at least the long term average incremental cost (LRAIC) of a given product or service. The article focuses on the application of activity based costing (ABC) to determine the LRAIC for each product. In addition to the analysis of the defi nition of LRAIC and the principles and objectives of ABC, the article also presents a practical example of the application of the presented approach by the postal operator of Canada (Canada Post).
Recommended Citation
Kulczycki, P. (2014). Determination of postal services price levels in compliance with competiton law – the calculation of the long term average incremental cost by way of activity based costing. internetowy Kwartalnik Antymonopolowy i Regulacyjny (internet Quarterly on Antitrust and Regulation), 3(2), 36-45. Retrieved from https://press.wz.uw.edu.pl/ikar/vol3/iss2/3
First Page
36
Last Page
45
Page Count
9
Publisher
University of Warsaw
