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.

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:

being born in poverty would limit the people's chances, opportunities and benefits.

this happen because of several things, such as:

- poor people tend to gain less access to good education and nutrition. this mean that their chance to obtain high paying jobs would also be limited.

- poor people tend to socialize with other poor people while the rich tend to socialize with other rich people. this means that simply throguh their social circle, rich people would have more business opportunities compared to the poor people.

- rich people tend to have more capital in their disposal. this would benefit them in business since it is far easier for them to fund their business operation compared to poor people.

they work in some type of way