Macro Economics-- Redbox Price Hike Could Dodge Netflix Outrage Essay

Macro Economics-- Redbox Price Hike Could Dodge Netflix Outrage - Essay Example Because the price has increased, it is reasonable to expect that the quantity demanded will decrease. This is because the market demand will adjust to the increased prices by not purchasing the same amount of DVDs as before. However, if demand is high enough, then quantity will remain relatively the same. This is because a competitor, Netflix, raised its prices by even more—60%. Even though consumers may not like the price hike, they may have no other option but to continue using Redbox’s services. I think that Redbox is doing the right thing by raising their prices because they need to make a profit. Because operating costs have risen, it is only natural to pass on that increase to customers. Redbox needs to be aware that its customer base may fall due to this announcement. If so, Redbox needs to decrease its prices marginally so that market equilibrium can be