Suppose the price of netflix subscription increases

Assignment Help Business Economics

Reference no: EM131159485

Suppose the price of a Netflix subscription increases while the price of Redbox rentals stays the same. If Redbox is an inferior good, what happens to the number of Redbox DVDs rented?

(A) Redbox rentals will go down.

(B) Redbox rentals go up.

(D) Redbox rentals could go up or down, depending on if the income effect or the substitution effect domi- nates.

(E) Redbox rentals will go down in the short run but the price will increase in the long run due to DVD firms leaving the market.

Reference no: EM131159485

Questions Cloud

Passing along costs : Suppose the price of coffee beans increases by $0.20 per pound. What is the effect of this raw material priceincrease on the demand for roasted coffee? If one pound produces 50 cups of coffee, would the price of a cup of coffee rise by $0.01? Explain..

Suppose the interest-rate cost of borrowing rises : Suppose a firm expects that a $40 million expenditure on R&D in the current year will result in a new product that can be sold next year. Selling that product next year would increase the firm’s revenue next year by $60 million and its costs next yea..

Population demographic changes-disease pattern changes : How and why have population demographic changes, disease pattern changes, increased costs, and increases in supply and demand for health care services impacted the US health care system?

About the single-price monopoly : Suppose the graph above is for a single-price monopoly. What is profit for a firm that makes the optimal price and quantity decisions?

Suppose the price of netflix subscription increases : Suppose the price of a Netflix subscription increases while the price of Redbox rentals stays the same. If Redbox is an inferior good, what happens to the number of Redbox DVDs rented?

Both people are okay with having partially-completed project : Ron Swanson takes 1 week to make a rocking chair or a bird house. Andy Dwyer would take 3 weeks to make a chair or 2 weeks to make a bird house. Assume that both people are okay with having partially-completed projects (e.g. half a chair) because the..

Employees prefer to have employer pay for health insurance : One reason why employees prefer for their employer to pay for their health insurance rather than receive increased wages and pay for their own health insurance is that wages are taxable income to the employees but the money the employer spends to buy..

What are the three main sources of health insurance : How can changes over time of the average height of the people in a country help to indicate the standard of living in a country? What are the three main sources of health insurance in the United States? Suppose a large firm allows its employees to ch..

What would happen to attempt to attain balanced budget : You are the Chief Economic Advisor of the President of Dreamland. Right now the country has unemployment of 5.0 %. The country has suffered a severe recession few years ago and it is showing some signs of slow growth lately but lot of people are stil..

User Account

All Pages