Economics class: Is the ‘subscription economy’ going to feel the Netflix effect?
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Market Structures, Pricing and Output Points, Profit, Income elasticity, Regulation, Contestable Markets
Click to read the article below and then answer the questions:
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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