Docstoc

What happened (DOC)

Document Sample
What happened (DOC) Powered By Docstoc
					Name: ________________                 Date: ___________                          Period: _______


                                        What happened?

Economics Background: SAN FRANCISCO (AP) -- Netflix's decision to raise prices by as
much as 60 percent is turning into a horror show.

The customer backlash against the higher rates, kicking in this month, has been much harsher
than Netflix Inc. anticipated. That prompted management to predict Thursday that the company
--the largest U.S. video subscription service-- will end September with 600,000 fewer U.S.
customers than it had in June.

Writing Prompt: Using the concept of elasticity, explain why Netflix is losing customers. In
your essay, be sure to include the following:

     A definition of elasticity
     Is the demand elasticity for Netflix elastic or inelastic?
     The tests for elasticity and where Netflix video (streaming movies) falls in terms of each
       test



    TS
                Netflix raised their prices by as much as 60 percent.
   CD
                Subscription service decreased by _______________ between
   CD           __________ and ______________.

                This was primarily because….
   CM

   CM

   CM

    CS
Name: ________________   Date: ___________   Period: _______

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:2
posted:12/29/2011
language:
pages:2