Assume that you are a product pricing manager at a large, multinational corporation specializing in consumer snack items, including a range of chocolate bars. You have received information indicating that a competing firm is considering increasing its prices considerably, given the onset of hostilities in a geographical area that supplies the highest proportion of the world's total cocoa production. Assume that you are sure that the firm has not discovered a technological process that would lower production costs otherwise. Also, assume that you are not aware of any large-scale expansions in a capacity that might heighten economies of scale or scope available to your competitor. In this environment, you must decide on a course of action regarding the near and medium-term pricing. Determine whether it might be advisable for your firm to raise prices or wait and see if your competitor does so. Present and justify your proposed actions using economic variables, as you state your conclusions to the firm's director of marketing, who has invited one of the firm's attorneys to sit in on your presentation.

1. Determine whether it might be advisable for your firm to raise prices or wait to see if your competitor does so.
2. Present and justify your proposed actions using economic variables.
3. Highlight for the firm's attorneys how the economic variables you have presented prove that any price changes will not be construed as price-fixing.