4. Webflicks. When Webflicks increased monthly subscription fees from $15 to
$17, 16% of its subscribers switched to alternative providers.
(a) Provide an estimate of Webflicks demand elasticity.
( 1715 )
5. Segmented market. A market consists of two population segments, A and B.
An individual in segment A has demand for your product q = 50- p. An individual
in segment B has demand for your product q = 120 - 2 p. Segment A has 1000
people in it. Segment B
2. Fundamental Theorem. Enunciate the Fundamental Theorem of
Microeconomics. Explain briefly and in intuitive terms what it means. Provide an
example of an industry where you think the model applies approximately. Explain
what assumption is required for t
3. Demand curve estimation. Discuss briefly the challenges in estimating the
price elasticity of demand of a given consumer good. What are the pros and cons
of each alternative approach?
Practically, estimating the demand is extremely difficult. One reaso