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When you sign up for Netflix membership, you pay a fixed fee per month and then you can stream as many shows as you want.
When you sign up for Netflix membership, you pay a fixed fee per month and then you can stream as many shows as you want. 1) What is your marginal cost of watching each show once you paid your membership fee? Let say you signed up for the basic plan with monthly payment equal to $9.99, and you end up watching 100 shows per month. 2) Now imagine, instead of requiring a membership fee, Netflix decides to charge $2 for each show you stream. Will you end up watching more, or fewer shows? Why?
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