Illustrate what implicit assumptions are the publisher

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Reference no: EM1351953

In an article about the financial problems of the USA Today, Newsweek reported that the paper was losing about 20 million a year. A Wall Street analyst said that the paper should raise its price from 50 cents to 75 cents, which he estimated would bring in an additional 65 million a year. The paper's publisher rejected the idea, saying that circulation could drop sharply after a price increase, citing The Wall Street Journal's experience after an increased its price to 75 cents. Illustrate what implicit assumptions are the publisher and the analyst making about the price elasticity?

Reference no: EM1351953

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