Author Question: Music Pricing Downloads of digital entertainment goods, e.g., movies, songs, books, have marginal ... (Read 460 times)

khang

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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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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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