Analyse the assumptions of price elasticity, Macroeconomics

In an article about the financial problems of USAToday,News week 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 it increased its price to 75 cents. What implicit assumptions are the publisher and the analyst making about price elasticity?

 

 

Posted Date: 3/22/2013 6:17:16 AM | Location : United States







Related Discussions:- Analyse the assumptions of price elasticity, Assignment Help, Ask Question on Analyse the assumptions of price elasticity, Get Answer, Expert's Help, Analyse the assumptions of price elasticity Discussions

Write discussion on Analyse the assumptions of price elasticity
Your posts are moderated
Related Questions
Multiple Expansion We have seen that a single bank in a banking system can lend rupee for rupee with its excess reserves. What is the lending ability of the commercial banking

#question.WHAT IS GDP AND DIFFERENT PRICE LEVEL IN SHORT RUN?.

Control: In apples molded by Penicillium expansum, most of the patulin is confined to the region of damaged tissue and simply removing the lesions reduces the toxin by 90%, but i


Classical Quantity Theories Quantity theories have had a long history and a widespread use in economics. As originally formulated these were not explicitly designed as theories

When Sonoma Vineyards reduces the price of its Cabernet Sauvignon from $15 a bottle to $12 a bottle, the result is an increase in a. the demand for this wine b. the supply of

The IS-curve in the AS-AD model The IS-curve is not affected by P in the AS-AD model We can define an IS-curve in the AS-AD model similarly to

A cupcake store is located in a mall and is the only cupcake store in that mall. The demand schedule for cupcakes (per dozen) is given in the table below. If the marginal cost to p

Roles of government in controlling market forces under neoclassical view

1. Consider a natural monopoly. I. Show graphically and discuss how price and quantity are set by the natural monopolist. II. Define the areas corresponding to the consumers'