Netflix has three different subscription plans for streaming video: watch one screen at a time in Standard Definition for $7.99 per month; watch two…

Netflix has three different subscription plans for streaming video: watch one screen at a time in Standard Definition for $7.99 per month; watch two screens at a time in High Definition for $10.99 per month; or watch four screens at a time in High and Ultra-High Definition for $13.99 per month. The ongoing difference in cost to Netflix between providing the one-screen plan vs. the four-screen plan is essentially zero. How do you explain the wide variety of prices for virtually the same service, given that the cost to Netflix of providing each plan is basically the same?

Select one:

a. Price discrimination between demanders. High demanders are willing to pay a high price for a plan that includes many channels. Low demanders aren’t, and are only willing to pay a low price for a relatively smaller number of channels.

b. There is less demand for, and more supply of, the one-screen plan so its equilibrium price is low. There is more demand for, and less supply of, the four-screen plan so its equilibrium price is high.

c. Price discrimination between demanders. One-screen plan purchasers are high demanders since they must value the smaller set of channels more than it they had a larger selection of channels they did not want. Four-screen plan purchasers are low demanders since there are many channels in the plan that they likely never watch.

d. Netflix is making the common mistake of trying to gain market share at the expense of maximizing profit. Offering a cheap one-screen plan is meant to entice buyers, but these buyers would usually pay the four-screen price anyway, since Netflix’s streaming video service has no close substitutes.

Show more

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10