CLO #1 – Describe how goals, constraints, incentives, and market rivalry affect economic decisions.
CLO #2 – Analyze demand, supply, equilibrium prices, and price elasticities as a quantitative tool to forecast changes in revenues.
Recently, Verizon Wireless ran a pricing trial in order to estimate the elasticity of demand for its services. The manager selected three states that were representative of its entire service area and increased prices by 5 percent to customers in those areas. One week later, the number of customers enrolled in Verizons cellular plans declined 4 percent in those states, while enrollments in states where prices were not increased remained flat. The manager used this information to estimate the own price elasticity of demand and, based on her findings, immediately increased prices in all market areas by 5 percent in an attempt to boost the companys 2020 annual revenues. One year later, the manager was perplexed because Verizons 2020 annual revenues were 10 percent lower than those in 2019the price increase apparently led to a reduction in the companys revenues. Did the manager make an error? Explain. (Problems and Applications end of Chapter 3)
Discussion Question Information: Answer all questions thoroughly, and be sure to provide one (1) direct response to the discussion question prompt and one (1) peer response. When posting peer responses, elevate your peers by asking probing questions that encourage your peers to engage in a more meaningful and deeper manner or by presenting additional ideas from research.
1 professional reference
"Place your order now for a similar assignment and have exceptional work written by our team of experts, guaranteeing you A results."