Problem
You run the marketing department of a company that makes chocolate bars. Your boss has let you know that economic conditions warrant an increase in the price of your tablets. You are perplexed by the idea that a price increase is profitable, because you have doubts about the elasticity of demand with respect to the price of your product.
Question I
Identify the information that would prompt you to increase the price of the tablets.
Question II
Discuss the potential effect of elastic demand and inelastic demand on profits.