Music Pricing Downloads of digital entertainment goods, e.g., ...

[khang]

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]

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

[khang]

Thank you

[dantucker]

Happy to help you