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1In June of 2011, Netflix dramatically changed the pricing for its video rentals. Previously, subscribers could both borrow one or two DVDs via the mail AND watch any film online for 10 dollars per month. As of June 2011, these two services were unbundled, and the combined price was raised to 12 dollars per month. Over the next 3 months following the price increase, Netflix lost 8,000,000 (20%) of its subscribers. [During the same period the Netflix stock price fell from 324 to 100.] Which of the following statements is(are) correct?
- AThe demand for Netflix services was perfectly elastic.
- BThe demand for Netflix services was elastic, but not perfectly elastic.
- CThe demand for Netflix services had a unitary elasticity.
- DThe demand for Netflix services was inelastic, but not perfectly inelastic.
- EThe demand for Netflix services was perfectly inelastic.
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- Quiz on Untitled, created by MacKenzie Elizab on 24/03/2014.
- Author
- MacKenzie Elizab
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- English
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