Econ Help PLEASE!!!?

It would seem that the analyst is making the assumption that the demand for the paper is relatively inelastic. If that is the case, an increase in price would lead to an increase in revenues, since demand doesn't respond as readily to price. The loss in the number of readers would be compensated for by the increase in price. This would be the case if there were only one national newspaper; if no other substitutes were available.

From the publishers side, demand seems to be relatively elastic. If they raise the price, they would lose a significant number or readers and the increase in price would not compensate for the loss of customers.

The analyst is assuming the that the price elasticity of demand (PED) is low, while the publisher thinks it is high. A high PED means a small increase in price sharply reduces demand so that increasing the prices can decrease revenue (and vice versa of course).

I've been surfing the web more than 3 hours today looking for answers to the same question, yet I haven't found a more interesting discussion like this. It is pretty worth enough for me.

I get that paper myself and I wont continue taking it if they raise the cost!

Valuable discussion, just what I was searching for.

Not quite sure how to answer this