Geometric Progression Argument
Mathematics is a powerful tool that can be used to support or refute arguments in various fields. One example of this is in the evaluation of multi-level marketing (MLM) strategies. MLMs are business models where individuals can earn income by not only selling a product but also by recruiting others to join and sell under them, forming a pyramid-like structure. However, this business model has been criticized for being unfavorable for the majority of participants, who are often at the bottom of the pyramid.
To prove this point, the concept of geometric progression can be used. Geometric progression is a sequence of numbers where each term is obtained by multiplying the previous term by a constant factor. In the context of MLMs, this factor can represent the income earned from each level in the pyramid. As the number of levels increases, the income earned from each level decreases.
As a result, the people at the bottom of the pyramid earn very little, while a small number of individuals at the top earn the majority of the income. This concept can be illustrated using a geometric series, where the sum of the series represents the total income earned by all participants. The formula for the sum of a geometric series is given by:
S = a(1 - r^n)/(1 - r)
Where S is the sum of the series, a is the first term, r is the common ratio, and n is the number of terms. In the context of an MLM, a is the income earned from the first level, r is the factor by which income decreases as the level increases, and n is the number of levels.
Using this formula, it can be shown that as n increases, the sum of the series approaches a limit, regardless of the value of a and r. This means that as the number of levels in the pyramid increases, the total income earned by all participants approaches a limit, regardless of the income earned from each level. As a result, the people at the bottom of the pyramid earn very little, while a small number of individuals at the top earn the majority of the income.
Moreover, the MLM business model is also unsustainable in the long term. As more and more people join the pyramid, there will eventually come a point where there are not enough people left to recruit. At this point, the pyramid will collapse, and most participants will be left without any income. This is because the number of people needed to sustain the pyramid grows exponentially with each level, and eventually becomes so large that it exceeds the total population of the world. This, coupled with the inherently unfavorable income distribution, makes MLMs a poor choice for most individuals and a unsustainable business model in the long term.
In conclusion, mathematics can be a valuable tool in formulating arguments and refuting claims, such as the assertion that MLMs are a fair and profitable business model for all participants. By using the concept of geometric progression, it can be shown that the income distribution in MLMs is inherently unfavorable for the majority of participants, making it a poor choice for most individuals.
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Article by Marcelo Gameiro
Published 07 Feb 2023https://mgameirollc.uteach.io/blog/geometric-progression-argument
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