From the New York Times article “Nintendo Wii to add Netflix service…”:
Given your previous answers, explain if it makes sense for Nintendo to form a
partnership with Netflix. Use elasticity to defend your answer.
what i would like to know is if i would cross price formula to figure out the answer to this problem? i mean i would use the formula to figure out if they were compliments? well here are the numbers...
the wii console in 2008 was $250 and in 2009 it was $199. netflix subscriptions in 2008 were 236,000 and in 2009 the sales were 300,000.
jus looking at the problem i think it might be a good idea, i mean there are millions of people who have the wii in their homes and if netflix could tap into jus a fraction of that market they would make a killing. my problem is i have to prove this using elasticity and im not sure how to do this...any thoughts? thanks in advance.
(((Q2-Q1)/(Q2+Q1))/2)/((P2-P1)/(P2+P1))/2 here is the formula that i was trying to use to prove if the two are complements? which would mean it would be a partnership for yahoo and netflix.