Is the demand curve for your product relatively elastic, inelastic or unitary elastic? Demonstrate for your company's product, by how much the quantity demanded will change if you pass on a 10% increase in cost. In other words, show your calculation of the percentage change in the quantity demanded if your prices are raised by 10%. You must provide a calculations showing the percentage change in quantity demanded.
Given your company's price elasticity of demand and the industry supply/competitive environment you face, prepare a statement for your board as to the potential impact on profits. Who will pay the larger share of the cost increases, your firm or your customer