Problem
Demand for News Kids. Consider the market for newspaper delivery kids in Kidsville. Each news kid receives a piece rate of $2 per subscriber per month and has a fixed territory that initially has 100 subscribers. The price elasticity of demand for subscriptions is 2.0. Suppose the new city council of Kidsville passes a law that establishes a minimum piece rate of $3 per subscriber per month. As a result, the publisher increases the monthly price of a subscription by 20 percent. How will the new law affect the monthly income of the typical news kid?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.