4. You are a manager, and the annual wage negotiations are being concluded.

Management has acceded to the trade union's demand for a 9 per cent wage increase, and is now considering whether prices should be increased by 9 per cent to cover this increase. You are asked to comment. Without considering changes in other possible variables, what would your comments be in the following circumstances?

a. Your firm's only product is one popular make of car.

b. Your firm has a world patent on a new computer game which has made all previous designs redundant, and this is your only product.