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Author Question: Music Pricing Downloads of digital entertainment goods, e.g., movies, songs, books, have marginal ... (Read 463 times)

khang

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on: Jul 1, 2018
Music Pricing Downloads of digital entertainment goods, e.g., movies, songs, books, have marginal costs that are essentially zero. If so, what elasticity are the sellers adjusting prices to achieve?

Question 2

In the strategic view of bargaining the outcome depends on
 a. Who makes the first move
 b. Who can commit to a position
 c. Whether or not the other party can make a countermove
  d. All of the above


dantucker

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Reply #1 on: Jul 1, 2018
Answer to Question 1

(P-MC)/P = 1/e, but if MC = 0, we have:
(P-0)/P = 1/e
P/P = 1/e
1 = 1/e
e = -1

Answer to Question 2

d


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khang

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Reply #2 on: Jul 1, 2018
Thank you :)


dantucker

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Reply #3 on: Jul 1, 2018
Happy to help you


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