First, calculate Netflix's Price Elasticity of demand using the period from the end of Q1, 2016 to
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Question:
First, calculate Netflix's Price Elasticity of demand using the period from the end of Q1, 2016 to the end of Q3, 2016. (Hint: You have to estimate, creatively, the percentage change in price (listed or actually paid) and the percentage change in quantity (subscriptions)).
Second, discuss how confident you are about your calculation and how it could be improved.
Third, what is the expected effect of the price increase upon Netflix's Revenue.
Fourth, what is the expected effect upon profits.
Fifth, can you explain the reaction of Netflix's stock price to the price increase?
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