A newspaper recently lowered its price from $0.50 to $0.30. As it did, the number of newspapers it sold increased from 240,000 to 280,000
a) What was the price elasticity of demand for this newspaper (Arc/ mid-point formula)?
b) What was the degree of elasticity for the newspaper?
c) A 1% change in the price of the newspaper led to a change in quantity demanded of______?
d) What happened to the newspaper’s total revenue as it dropped its price?
2. Suppose that at a price of $55, 100 units were sold while at a price of $33, 153 units were sold. Without calculating the price elasticity value, can you determine whether it is elastic, unit-elastic, or inelastic? Show your work and explain your answer.