MICROECONOMICS
MICROECONOMICS
11th Edition
ISBN: 9781266686764
Author: Colander
Publisher: MCG
Question
Book Icon
Chapter 6, Problem 4QE
To determine

Determine the price elasticity of demand.

Blurred answer
Students have asked these similar questions
In 2014, the Seattle Seahawks won the Super Bowl. Draw a supply and demand graph for Seahawk tickets in the following season to show the impact of the Super Bowl win.  (It would be the same graph for Seahawk t-shirts, hotdogs at the game and beer.)
Question The following appeared in an article in the Wall Street Journal: “Last week, true to discount roots dating to 1971, Southwest [Airlines] launched a summer fare sale on domestic flights, with one-way prices as low as $49. As in the past, major competitors were forced to follow suit.” Why would other airlines be “forced” to follow Southwest’s fare decrease? What if this fare decrease took place during an economic recession, when incomes and the demand for airline travel were falling?
In 2009, Netflix raised its prices by 10% and the number of Netflix customers fell by nearly 20% (assuming everything else was held constant) In 2019, Netflix raised its prices by 10% and the number of Netflix customers fell by only 2% (assuming everything else was held constant) 1)  The price increase was the same, but Netflix lost much less customers on a percentage basis in 2019 versus 2009.  Using supply and demand concepts, what could explain the difference in the decrease in number of customers on a percentage basis that Netflix lost in 2019 vs. 2009?  Explain why. 2) Did Netflix come out better with the 2009 price increase or the 2019 price increase?  Using concepts that you have learned about supply and demand, explain why Netflix's revenues and profits increased or decreased in 2009 and in 2019 due to the 10% price increase.
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Text book image
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Macroeconomics
Economics
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Microeconomics
Economics
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Cengage Learning