MANAGERIAL/ECON+BUS/STR CONNECT ACCESS
9th Edition
ISBN: 2810022149537
Author: Baye
Publisher: MCG
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Chapter 13, Problem 8CACQ
To determine
To explain: The plan of action should be taken.
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FRONT PAGE
Pricing Disney+
Disney decided it wanted to provide streaming services directly to customers, rather than
renting its library of films and television shows to other streaming services like Netflix. But
how successful would a streaming service be? In other words, what did the demand for a
"Disney+" streaming service look like? Disney knew that the number of subscribers would
depend not just on the attractiveness of the Disney archives, but also on the subscription
price. After doing some market research, Disney decided to launch Disney+ at a price of
$6.99 a month (or $69.99 per year). When Disney+ was launched on November 12, 2019,
10 million people signed up on the first day-a resounding success!
Source: News reports, October-December 2019.
Suppose Disney+ changes its monthly subscription price from $7 to $9 per month. Graphically show the impact of this price change in
the following markets:
a. Popcorn, pizza, and other movie snacks
Every time you go to your firm’s lounge to get a cup of coffee, the pot is empty. Why?
Consider some of the products that are widely advertised on television. By what kind of firm is each produced—a perfectly competitive firm, an oligopolistic firm, or another type of firm? How many major products can you think of that are not advertised on TV?
Chapter 13 Solutions
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