Page has a penalty?

So I am a small business owner and I've been doing my own SEO for a while now. One of my pages is showing all the examples of a penalty. 20-30 spot fluctuations and sometimes out of the SERPs. Here's what happened. This page has been up for over a year now. 3 months ago I created another page with similar content for another location and I suspected that they were cannibalizing since the first page started dropping to spots 7-9. I no-indexed the 2nd page, hoping it would clear the mess, and after that it went crazy. Going to spot 14 one day, then number 41 the next, hovering around page 3 for a few days, dropping off for another few days and coming back in on page 8 before jumping up to spot 15, for example. The rest of the domain has never been better. This page has 15 backlinks, most of them purchased, and was ranking 1-3 for the keyword prior to the 'penalty' Do I delete the page, create another similar one and 301 for the links? or what? It's been over two months of this behavior. Right now, the 2nd page I created is still no-indexed and I've tried to clear up the content on the first page to fit better with the keyword, but no changes.