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Specification:

  • Market Structures, Pricing and Output Points, Profit, Income elasticity, Regulation, Contestable Markets

Click to read the article below and then answer the questions:

Is the ‘subscription economy’ going to feel the Netflix effect?

  • Using the model of a firm in imperfect competition, show the effect of the falling demand for subscription services. Comment on how this affects price output and profit (pop)

  • Explain whether subscription services are income elastic or income inelastic

  • New Regulation will raise the costs further to firms in the subscription economy. Evaluate the impact on both consumers and firms

  • Netflix is one of a number of firms selling video content. Discuss how the falling number of subscribers affects contestability in this market

John Greenwood, Bromley High School for Girls 

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