First Scenario: For most business firms that sells a particular good on the market, a decision has to be made from time-to-time to either raise the price of the good, lower the price of the good, or keep the price of the good unchanged.

Based only on the concept of demand elasticity:

1. When would you recommend raising the price of the good? Explain why.

When would you recommend lowering the price of the good? Explain why.