Long Run Incremental Cost


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Long Run Incremental Cost

A foreseen, future change in the incremental cost to a company, which is the cost of a company producing one more unit of a product. Long run incremental costs are likely changes to the inputs of making a product, such as the cost of raw materials. For example, if making a product requires a significant amount of oil, and oil prices are thought to be likely to decline, the long run incremental cost is also likely to decline. While there is no guarantee that the long run incremental cost will change in the exact amount expected, attempting to calculate it helps a company make future investment decisions.
References in periodicals archive ?
However, NTT DoCoMo, does not have to submit to long run incremental cost calculation (LRIC)by the MPHPT to determine its interconnection charges.
a) The TELRIC, or Total Element Long Run Incremental Cost, model is a formula that is used to determine the price that incumbent local carriers can charge competitors when leasing out parts of the public phone network, which is controlled by the ILECs.
The Commission should establish a pricing standard based upon total service long run incremental cost as the pricing standard for unbundled network elements and interconnection services.