Why Is Netflix Price Hike Probably Not The Last For Cord Cutters

In the article “Netflix price hike probably not the last for cord cutters”, by Mike Snider, it points out that even though Netflix is raising their prices they are more than likely not going to lose that many customers. “In fact, demand is so strong that analysts expect consumers, whether they’ve canceled cable or just added these streaming services to their monthly entertainment bill, to swallow further price hikes — which could come from Netflix or its major competitors, Hulu and Amazon.” (Snider, 2017) With them being subscribed to multiple streaming services they are paying around the same price as what they paid for cable. “There’s so many streaming services that despite their willingness to let you leave whenever you want, some consumers may have accumulated multiple subscriptions and lost track of how much they are spending.” (Snider, 2017)

“The equilibrium process is so powerful that it is often referred to as the law of supply and demand, the idea that market prices adjust to brig nth quantity supplied an the quantity demanded into balance” (Mateer and Coppock, 2018, p 95) Even though Netflix is raising prices a new equilibrium will be established since it is shifted up with the price increase and then the quantity staying the same. This results in the demand being inelastic but if there was a significant price increase that would change. “You can also tell whether the demand for something is inelastic by looking at the demand curve. Since the quantity demanded doesn't change as much as the price, it will look steep.” (Amadeo,