Answered

Discover a wealth of knowledge at Westonci.ca, where experts provide answers to your most pressing questions. Discover comprehensive answers to your questions from knowledgeable professionals on our user-friendly platform. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.

1. Have you "pulled the plug?" With Netflix, Amazon Prime, CBS All access, people are leaving cable in large numbers. Netflix et al are substitutes for cable TV,
and with a lower
priced substitute we should see prices falling. In addition, Netflix is increased competition, and more competition shifts the supply curve
rightward,
which should also cause a drop in prices.
And yet, cable prices aren't falling. Why not? Is supply and demand really failing? Discuss.
2. Identify a good that you have purchased recently in which you believe that you received a large consumer surplus. Explain, using the economic definition of
consumer surplus in your answer.

Sagot :

GinnyAnswer

Final answer:

Cable prices may not fall due to bundling, market power, and infrastructure costs. Consumer surplus happens when the price paid is below what a consumer values a good.


Explanation:

The reason cable prices aren't falling despite the rise of streaming services like Netflix could be due to various factors:

  1. Complexity of bundling: Cable companies often bundle various services together, making it harder to directly compare prices to standalone streaming services.
  2. Market power: Cable companies may have market power in certain areas, allowing them to maintain higher prices.
  3. Investments and infrastructure costs: Cable companies have invested heavily in infrastructure which may keep prices stable.

Consumers receiving a large consumer surplus occurs when the price they pay for a good is lower than the highest price they are willing to pay. For example, buying a discounted airline ticket can lead to a consumer surplus when the price is lower than what the consumer values the flight at.


Learn more about Consumer behavior and pricing in the cable and streaming industry here:

https://brainly.com/question/14919946


Thanks for stopping by. We are committed to providing the best answers for all your questions. See you again soon. We appreciate your time. Please revisit us for more reliable answers to any questions you may have. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.