1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Bas_tet [7]
3 years ago
6

Bellsouth Mobility (BM) ran a pricing trial in order to estimate the elasticity of demand for its services. The manager selected

4 states that were representative of its entire service area and increased prices by 5% to subscribers in those areas. One month later, the number of its customers enrolled in BM's plans declined 4% in those states, while enrollments in states where prices were not increased remained flat. Based on this information, the manager estimated the own price elasticity of demand and based on her findings immediately increased prices in all markets by 5% in an attempt to boost the company's revenues. One year later, the manager was confused because BM's revenues were down 10%. Apparently, the price increase led to a reduction in the company's revenues. Did the manager make a mistake? Explain.
Business
1 answer:
hichkok12 [17]3 years ago
6 0

Answer:

The manger did not make a mistake

To determine the effect that an increase in price would have on revenue, we have to determine the price elasticity of demand.

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price

Price elasticity of demand = percentage in quantity demanded / percentage change in price

4% / 5% = 0.8

The elasticity of demand is less than 1, this means that demand is inelastic

When demand is inelastic, if price is increased, the fall in quantity demanded would be less than the increase in price. As a result, if price is increased total revenue would fall.

Based on the manger's calculation, demand is inelastic, so she was not wrong in increasing price.

Explanation:

You might be interested in
Ordering a mocha latte and paying for it from the starbucks smartphone app is using what type of internet commerce?
FromTheMoon [43]
<span>You are using M-Commerce (Mobile Commerce).
It is a type of e-commerce that can be handled from a mobile phone, a PDA or smartphone The first M-Commerce was launched in 1997, and since then its use has become widely spread worldwide. There are different payment methods to choose from, such as: contactless payment, credit cards and debit cards, micropayment services, and stored-value cards</span>
7 0
2 years ago
A client/server network is an example of ________ administration
sladkih [1.3K]
<span>A client/server network is an example of Central administration
In computer network, a central administration refers to something that enabled several computers to be connected under a single medium.
An example of The real life implication of a client/server net work is the system that we use for online multiplayer gaming</span>
4 0
3 years ago
Taking explicit account of a rival's expected response to a decision you are making is called:
IgorC [24]

The answer is strategic decision making. This is also referred as strategic planning in which a group of people or an individual engage into making or creating the goals or objectives that the organization would want to achieve or tackle in a way of providing altering strategies and to obtain the goal that they aim for.

7 0
3 years ago
When reviewing the balance sheet for Portable Pet Care, Inc., a mobile small animal care business, Ricky noted the following inf
mash [69]

Answer:

The net worth (owners' equity) for this business is $2.2 million

Explanation:

Net worth: It is also known as owner's equity which is a difference between total assets and total assets.

In this question, we use the accounting equation which is used to balance the debit and credit side of the balance sheet items.

So, the accounting equation is

Total Assets = Total Liabilities + Owner's Equity

where,

Company assets are $3.5 million

And, liabilities is $1.3 million

Now, apply the above equation to find out the value of the owner's equity

So, owner equity would be equals to

= $3.5 million - $1.3 million

= $2.2 million

Hence,  the net worth (owners' equity) for this business is $2.2 million

3 0
3 years ago
The income tax saved by using lifo instead of fifo is equal to the​ ________ times the income tax rate.
marshall27 [118]
C. cost of the ending inventory
3 0
3 years ago
Other questions:
  • Zenovia inc., a well-established and reputed multinational enterprise (mne), is headquartered in a highly developed economy. it
    8·1 answer
  • The __________ is the fifth of five phases of a project. This is the phase in which the project manager or team confirms the fin
    15·1 answer
  • The​ risk-free rate is 3.4​% and you believe that the​ S&amp;P 500's excess return will be 11.9​% over the next year. If you inv
    5·1 answer
  • In many​ countries, people hold money as a cushion against unexpected needs arising from a variety of potential scenarios​ (e.g.
    10·1 answer
  • On January 1, Power House Co. prepaid the annual rent of $10,140. Prepare the journal entry to record this transaction.
    13·1 answer
  • After the presentation, you discover that you provided some inaccurate figures. in a few cases, you inadvertently overstated by
    14·2 answers
  • During 2019 the Barker Company had a net income of $75,000. Below is information taken from Barker’s last two balance sheets: 20
    6·1 answer
  • Write a summary of the 3 principles of economic activity
    8·2 answers
  • The business department of State Community College is increasing its online course offerings. Its objectives are uniformity of q
    15·1 answer
  • The type of data that has already been gathered by another source is called
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!