Between 2008 and 2009, average circulation of U.S. newspapers fell by 7%. The New York Times suffered a relatively smaller decline, with weekday circulation falling 3.6% to 1,039,031. The Times announced a quarterly loss of $74 million with circulation revenue increase slightly due to a price increase in 2008 from $1.25 to $1.50. In early May 2009, it was reported that the Times would raise its weekday price from $1.50 to $2 and that the price increase would increase revenue by $40 million. (Source: "New York Times set to increase price", Financial Times, May 2, 2009). a. Using the 2008 price and circulation information, calculate the price- elasticity of demand for the New York Times weekday edition. b. At the current circulation of say 1.04 million and price of $1.50, and assuming 300 weekdays a year, what is the New York Times' current annual revenue from weekday sales? c. Consider the expected 2009 price increase from $1.50 to $2. What is the percentage change in price? d. Suppose that the expected 2009 price increase from $1.50 to $2 does indeed yield $40 million in incremental revenue. What is the percentage change in revenue over your answer in (b)? e. Substitute the percentage changes from (c) and (d) into the following rule: percentage change in revenue = percentage change in price + (price- elasticity of demand x percentage change in price). (Note that this rule was not taught in the lecture on elasticity.) Calculate the price-elasticity of demand which would imply the $40 million increase in revenue. f. Compare the elasticity from (e) at a price of $1.50 with the elasticity from (a) at a price of $1.25. Does the difference in elasticities seem reasonable