In 2016, Netflix increased prices for their U.S. subscribers from $7.99 to $9.99 per month.1 Following the price increase, the rate of subscription growth decreased significantly, from 1.56 (in the fourth quarter of 2015, before implementing the price increase) to 0.40 (in the third  quarter of 2016, after implementing the price increase). In addition, the stock price of the  company fell by about 16% (price dropped in July 2016, after releasing the second quarter  earnings, to $85.84 per share, from $102.23 on March 31, 2016). How much is the price  elasticity of demand for Netflix subscription in this case, using the midpoint method when  calculating the percentage change.

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