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In 2011, Netflix raised the price for customers who wanted to keep both streaming video and DVD rental from about $10 a month to $15.98 a month. About how large was this price increase, according to the source?
AAbout 600 percent
BAbout 16 percent
CAbout 60 percent
DAbout 6 percent
Answer & Solution
Correct answer: C. About 60 percent
1. The 2011 Netflix package price rising from about $10 a month to $15.98 a month.
2. It states this change directly as a price increase of about 60 percent.
3. Six percent or sixteen percent would be far too small to describe roughly doubling the price.
4. Six hundred percent would describe a price increase to about $70, not $15.98.
_Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 5 "Elasticity", section 5.4 | Elasticity in Areas Other Than Price_
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