Media Economics: Applying Economics to New and Traditional Media differs from ordinary media economic texts by taking a conceptual approach to economic issues. As the book progresses through economic principles, authors Colin Hoskins, Stuart McFadyen, and Adam Finn use cases and examples to demonstrate how these principles can be used to analyze media issues and problems. Media Economics emphasizes economic concepts that have distinct application within media industries, including corporate media strategies and mergers, public policy within media industries, how industry structure and changing technologies affect the conduct and performance of media industries, and why the United States dominates trade in information and entertainment.
Chapter 2: Demand and Supply
Prices play a central role in resource allocation. In this chapter, we examine how the quantity demanded and quantity supplied of a product depend on its market price and how the interaction of demand and supply actually determines this price. We look at the sensitivity of quantity demanded and supplied to price, what is termed the price elasticity of demand and the price elasticity of supply. Aspects of demand, supply, and elasticity for media goods and services are examined.
This chapter should provide you with an understanding of the economic concepts necessary to answer the following media-related questions: How do we know that many estimates of the losses suffered by the music and video industries as a result of piracy are ...