Description of the Task
Read Adam Turner’s article “Netflix slugs Aussies” published in Sydney Morning Herald on 28 June 2017.
Use economic models if necessary to answer the questions.
Q1. Using the demand and supply model, explain why Australians will need to pay up to 20% more for streaming online.
To determine whether Australia’s demand for streaming online is price elastic or not, you can use the determinants that measure price elasticity to assess it.
Q2 (b). Based on your answers to Q2(a), describe the effect that you expect price increases to have on total streaming revenue.
Use an appropriate economic model to illustrate your conclusion.