The survey by the Pew Internet and American Life Project showed about 14 per cen
ID: 1254360 • Letter: T
Question
The survey by the Pew Internet and American Life Project showed about 14 per cent of Americans downloaded music files over the internet in the four weeks ending on December 14. That compared with 29 per cent last May, just before the Recording Industry Association of America announced it was preparing to sue people who shared unauthorised music files over the internet.Since September the RIAA has filed hundreds of lawsuits against music pirates, claiming "egregious" copyright infringement and seeking up to $150,000 per violation. Many defendants have settled out of court for up to $10,000.
2. Based on the numbers reported here, would you say that the demand curve for illegal downloads is elastic? That is, does a given percentage change in the full cost of illegal downloads cause a greater percentage change in the quantity of illegal downloads? What other information would you like to have to answer this question?
Explanation / Answer
For starters with a 14% demand, demand was relatively elastic however, we notice the increase in demand in a 4 week time frame to 29%. This tells us the slope of our demand curve is becoming more inelastic and our slope is increasing. In essence, a percentage change in the cost of downloads now and projected by the large increase of demand, in the future, will in fact change the quantity of illegal downloads. Now, with the demand cure more inelastice, a price increase in these illegal downlaods, or in this case, a fine increase/risk increase, will decrease the quantity demanded however, not by as much as 4 weeks prior to December 14th. It would be great if we knew if and how much consumers are paying for these downloads. This will give us a better understanding of an acutal number or percent change in the price and quantity. We would also like to know about regulation by the government. If there is regulation, the demand for this good will become even more inelastic as the drug market has. It is hard to get therefore, the price for drugs are much higher. Hope this helps
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