Here the newspaper is sold cheaply.
I realize "barato" can work as an adjective or an adverb, but given its placement within the sentence used in the example, this reads to me like "The cheap newspaper is sold here," as if the expensive newspaper is sold across the street—they probably charge you just to look at the headlines!
Yes, that's correct, this could be interpreted in a different way as you said.
To make it clear, if you want to convey what the adverb would, i.e "cheaply" then I'd place the adverb right after the verb "aquí se vende barato el periódico" - this way you can only interpret it that way.
However, this sentence with "barato" at the end:
Aquí se vende el periódico barato.
could be interpreted in either way:
1. Here they sell the paper cheaply.
2. Here the sell the cheap paper. (not the expensive one)
There is a lot of flexibility in terms of placement for adverbs in Spanish.
I hope it clarified it.
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