Assume that you are the director of marketing for a firm that manufactures candy bars. Your boss has suggested that the current economic conditions merit an increase in the price of your candy bars. You are concerned that increasing the price might not be profitable because you are unsure of the price elasticity of demand for your product. Develop a plan for the measurement of price elasticity of demand for your candy bars.
What findings would lead you to increase the price? What findings would cause you to rethink the decision to increase prices? Develop a presentation for your class outlining
(1) the concept of elasticity of demand,
(2) why raising prices without understanding the elasticity would be a bad move,
(3) your recommendations for measurement, and
(4) the potential impact on profits for elastic and inelastic demand.