Many movie consumers who used to rent DVDs are now patronising online video rentals, especially, streaming services.What impact did the advent of online video rentals and streaming have on the in-store movie industry? Use the demand and supply diagram to illustrate your answer. Pay attention to how the equilibrium quantity and price adjust. Make state all your assumptions. Which would be more price elastic, the demand for Netflix online streaming or the demand for online movie rentals in general? Explain. Would the cross-price elasticity of demand for online movie rentals and in-store movie rentals be positive or negative? What does your answer imply for the equilibrium price and quantity of online movie rentals? Use the demand and supply diagram to illustrate your answer. Because of COVID-19 most people are staying indoors, yet they cannot afford online streaming movies, like Netflix. Should the government regulate the price of online streaming? In your answer, critically discuss the pros and cons of price regulation.

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Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 6CQQ

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Many movie consumers who used to rent DVDs are now patronising online video rentals, especially, streaming services.

What impact did the advent of online video rentals and streaming have on the in-store movie industry? Use the demand and supply diagram to illustrate your answer. Pay attention to how the equilibrium quantity and price adjust. Make state all your assumptions.

Which would be more price elastic, the demand for Netflix online streaming or the demand for online movie rentals in general? Explain.

Would the cross-price elasticity of demand for online movie rentals and in-store movie rentals be positive or negative? What does your answer imply for the equilibrium price and quantity of online movie rentals? Use the demand and supply diagram to illustrate your answer.

Because of COVID-19 most people are staying indoors, yet they cannot afford online streaming movies, like Netflix. Should the government regulate the price of online streaming? In your answer, critically discuss the pros and cons of price regulation.

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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