If 50-inch flat screen TVs became cheaper and buyers expected Netflix subscription prices to fall next year, what could we safely conclude would happen to the equilibrium price of a new Netflix subscription?

Question

Quizplus · Accepted Answer

The expectation of a future price decrease in Netflix subscriptions would likely decrease current demand, while cheaper TVs might increase demand. These opposing effects make it uncertain whether the equilibrium price would rise or fall.

If 50-Inch Flat Screen TVs Became Cheaper and Buyers Expected