Discuss why you think Netflix conducted this test and what you think they found from that test based on their later decisions.

Read the following article:

Netflix Tested a Price Hike in Australia FORTUNE

http://fortune.com/2017/05/15/netflix-price-hike-australia/

By TOM HUDDLESTON JR.

May 15, 2017 Netflix customers in Australia could soon be facing steeper monthly charges. The popular streaming service on Monday confirmed that it recently tested higher subscription prices for new customers in Australia. The companywhich has nearly 100 million global subscribers and expanded to Australia in 2015has reportedly tested raising prices for new subscribers by as much as three Australian dollars (AU). Netflix's test resulted in some Australian customers seeing price increases for the streaming service's Basic plan (going from AU$8.99 to AU$9.99 per month), while Netflix's Standard plan increased AU$2 to AU$13.99 and the Premium plan increased AU$3 to AU$17.99 per month, according to The Australian. Netflix confirmed the tests, but emphasized that it has not yet formally announced any permanent price increases. "We continuously test new things at Netflix and these tests typically vary in length of time," the company said in a statement. "In this case, we are testing slightly different price points to better understand how consumers value Netflix. Not everyone will see this test and we may not ever offer it generally."

Addendum from the lecturer: They increased the prices to $9.99, $13.99 and $17.99 respectively from 1st July 2017. And in 2019 they increased the premium plan to $19.99, while leaving the other two prices constant.

Discuss why you think Netflix conducted this test and what you think they found from that test based on their later decisions.

Refer in particular to concepts from the Week 3 lecture topic, such as what price elasticity of demand is and how it is calculated and used, its relationship with revenue, and relevant determinants of price elasticity of demand.

keep this all things in mind you have to answer that

This criterion is linked to a learning outcome Appropriate definition of Price Elasticity of Demand provided, including how it is calculated

This criterion is linked to a learning outcome Explanation of the meaning and usage of price elasticity of demand

This criterion is linked to a learning outcome Discussion of the relationship between elasticity and revenue

This criterion is linked to a learning outcome Analysis of why Netflix would engage in this test

This criterion is linked to a learning outcome Discussion of what can be inferred from their decision to implement it permanently

This criterion is linked to a learning outcome Discussion of the determinants of elasticity relevant to the case of Netflix

This criterion is linked to a learning outcome Appropriate economic terminology used without error

This criterion is linked to a learning outcome Appropriate logical sequence of ideas

This criterion is linked to a learning outcome Appropriate writing style and tone