Please provide a detailed explanation for the question:

Weber's Law states that for a change in the stimulus to be noticed, the change has to be a constant fraction of the existing stimulus. That is, if the existing stimulus is S, then the change, Ds, should be a constant fraction, k, such that:

Ds / S = k

Take the perspective of a marketing manager who faces increasing raw material costs to produce Tortilla Chips. An increase in the cost of the raw materials has increased the cost of manufacturing the chips by 15%.You wish to maintain the current level of profit on the chips.

You face two choices:

you can either increase the price of the bag of chips while keeping the size of the bag constant, or

you can decrease the amount of chips in the bag while keeping the price constant.

You ideally want to make a change that is less than the just-noticeable threshold of the consumer (i.e., pass the cost increase on to the consumers without them noticing it).

For the purpose of this exercise, assume that:

you can take 1-ounce out of a 5-ounce package before consumers notice the difference,

you can increase prices by 5 cents over the original price of a $1.00 before consumers notice

you need to increase prices by 15% to pass on the entire cost increase.

We assume that cost is linear (aka do not over complicate things)

1.What would you choose to do - increase prices, or reduce quantity? Why? What is the exact price or quantity of the new product to pass on the cost increase?

• Hint:Calculate the constant of proportionality for the j.n.d for quantity and price (%).

***Please provide detailed answer for each question - Also, the subject being studied is Consumer Behavior**

Thank you!