Publisher and the analyst making about the price elasticity

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

Reference no: EM131242503

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