What is the advantage of using the midpoint method

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Suppose the Daily Newspaper estimates that if it raises the price of its newspaper from $1.00 to $1.50 then the number of subscribers will fall from 50,000 to 40,000.

a. What is the price elasticity of demand for the Daily Newspaper when elasticity is calculated using the midpoint method?

b. What is the advantage of using the midpoint method?

c. If the Daily Newspaper's only concern is to maximize total revenue, should it raise the price of a newspaper from $1.00 to $1.50? Why or why not?

Reference no: EM131098574

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