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Amazon recently raised the rate for Prime membership to $99 a year from $79, the first price increase for the shipping and video-streaming service. The Seattle retailer said the price increase was needed to offset rising delivery and content-acquisition costs. As a result of the price increase, “analysts said they expect fewer than 10% of the more than 20 million Prime members to drop their accounts.”
With the information provided, can you calculate the price elasticity of demand? Price elasticity of supply? Or both
According to the data, is the price elasticity of demand for Amazon Prime elastic or inelastic?
According to the estimates, should Amazon’s revenue increase or decrease after the price increase?
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