ECN 5210 Peter Liedman

Mini-Case ‘Starhub’
a) Identify changes in demand and costs (fixed and marginal costs relative the number of
subscribers) arising from StarHub’s acquisition of the EPL rights.
After Star Hub’s acquisition of English Premier League (EPL), it became the only provider in
Singapore. StarHub won these exclusive rights with a fixed cost of 160 million which is equal to
the acquisition bid. In calculating marginal price, we use variable cost in addition to fixed cost.
Thus $160 million divided by 504,000 equals $317.

b) Discuss characteristics of StarHub’s demand, specifically discuss the fact that as prices went
up. (Hint: does this violate the law of demand? If not, why?)
As the amount went up, so did the number of subscribers. This goes against the law of demand
so did the number of subscribers. The higher the price, the lower the quantity demanded.