Let's examine the income statement for a solution called Andorra, located in the Secure Corporation product family. The statement is shown below.

Net Sales (unit sales of 1,000,000 x price paid of $10) = 10,000,000 less: Cost of Goods Sold (unit sales x unit cost of $8) = 8,000,000 Gross Margin = 2,000,000 less: Operating Expenses = 1,500,000 Net Profit before Taxes = 500,000 Net Profit % = 500,000/10,000,000 = 5.0% The product manager for Andorra is under pressure to raise prices to meet higher profit targets. She plans to raise price by 1% but is uncertain about the financial outcomes from the price increase. She assumes unit CGS remain at $8 and Operating Expenses remain at $1,500,000. She believes the elasticity of demand to be -1.5 in response to the 1% price increase, based on an internal pricing study. A. What are the expected financial results of the price increase for Andorra? B. What are the marketing implications of the decision to raise the prices for Secure?