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Q. In an article about the financial problems of USA Today, Newsweek reported that the paper was losing about $20 million a yr. A Wall Street analyst said that the paper should raise the cost form 5o cents to 75 cents; elucidate which he estimated would bring in an additional $65 million a yr. The paper's publisher rejected the idea, saying that circulation could drop sharply after a cost increase; citing The Wall Street Journal's experience after it increased its cost to 75 cents. Illustrate what implicit assumptions are the publishers also the analysis making about cost elasticity?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9171756

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