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In November 2 0 1 0 Netflix announced a new lower price for streaming video direct to home televisions. At the time, Netflix had no

In November 2010 Netflix announced a new lower price for streaming video direct to home televisions. At the time, Netflix had no serious competitors - Netflixs share of the digital download market was more than 60%(the second firms was only 8%). Just three months later, Amazon announced that it was entering the market for streaming video. What do these two announcements tell us?
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A high market share is a sign of little competition and it leads to higher prices.
A high market share is a sign of little competition but it may not lead to higher prices.
A high market share is not necessarily a sign of little competition but it does lead to higher prices.
A high market share is not necessarily a sign of little competition and it may not lead to higher prices.

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