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Price war amongst red tops – price elasticity of demand
Jim Riley
7th June 2010
The Daily Star has decided to start an almighty price war amongst the red top papers by slashing their price from 20p to 10p. Do you pupils think this will work? Hopefully someone will say it depends on the price elasticity of demand for these newspapers. On the one hand demand should be elastic as there are many substitutes on the market. On the other it could be inelastic because it is such a small percentage of people’s income. Would the Daily Star hope demand is elastic or inelastic?