In 2011,Netflix raised prices on its DVDs and internet streaming plan.The Reed Hastings,CEO of Netflix,believes
A)Netflix is an industry leader thereby making the demand curve inelastic
B)Netflix is an industry leader thereby making the demand curve elastic
C)People are willing to pay more for the good
D)There are many substitutes to Netflix's products

Question

Quizplus · Accepted Answer

Netflix is an industry leader, which means that it has a large market share and is well-known by consumers. This makes the demand curve for Netflix's products inelastic, meaning that consumers are less likely to switch to other products if the price increases.

In 2011,Netflix Raised Prices on Its DVDs and Internet Streaming