Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 17, Problem 9SPPA
To determine
To explain:
The reason for new entrants of firms in streaming-video market and changes in economic-profit in short-run and long-run.
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2. Netflix profits slide
Netflix has hit a bump in the road on its quest to reach 60 million to 90 million subscribers in the United States and, by the end of 2016, become fully global. Netflix faces fierce competition from streaming rivals like Amazon, HBO, and Hulu and also competes against cable, satellite, YouTube, and DVDs.
Source: The New York Times, October 14, 2015
Explain why more firms have entered the streaming-video market and how the economic profit of firms in the market will likely change. What will economic profit be in the long run?
Sony announces Smart Tennis Sensor
Tennis racket maker Babolat introduced its smart racket
Play Pure Drive in 2013. Smash and Shot Stats soon
followed. Now Sony is partnering with Wilson to make
Smart Tennis Sensor, a device that sits at the bottom of a
racket's handle and tracks every metric and statistic that a
tennis player or coach could need.
Source: Gizmag August 22, 2014
Explain why the economic profit that Babolat and Sony
make in this market is likely to be temporary.
Draw a graph to illustrate the outcome in the long run.
Show the excess capacity and markup in the long run.
Babolat's and Sony's economic profit from smart rackets is
likely to be temporary because
OA. other firms will enter the market and demand for
rackets made by Babolat and Sony will decrease
OB. the number of tennis players is likely to decrease
OC. other firms will enter the market and the supply of
smart rackets made by Babolat and Sony will
decrease
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Chapter 17 Solutions
Foundations of Economics (8th Edition)
Ch. 17 - Prob. 1SPPACh. 17 - Prob. 2SPPACh. 17 - Prob. 3SPPACh. 17 - Prob. 4SPPACh. 17 - Prob. 5SPPACh. 17 - Prob. 6SPPACh. 17 - Prob. 7SPPACh. 17 - Prob. 8SPPACh. 17 - Prob. 9SPPACh. 17 - Prob. 10SPPA
Ch. 17 - Washtenaw Dairy in Ann Arbor, Michigan, sells 63...Ch. 17 - Prob. 2IAPACh. 17 - Prob. 3IAPACh. 17 - Prob. 4IAPACh. 17 - Prob. 5IAPACh. 17 - Use the following information to work Problems 5...Ch. 17 - Prob. 7IAPACh. 17 - Prob. 8IAPACh. 17 - Prob. 9IAPACh. 17 - Prob. 1MCQCh. 17 - Prob. 2MCQCh. 17 - Prob. 3MCQCh. 17 - Prob. 4MCQCh. 17 - Prob. 5MCQCh. 17 - Prob. 6MCQCh. 17 - Prob. 7MCQ
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