Suppose you are in charge of sales at a pharmaceutical company, and your firm has a new drug that can help people who are suffering from thinning and/or hair loss to grow hair. Assume that the company wants to earn as much revenue as possible from this drug.

• If the elasticity of demand for your company's product at the current price is 1.4, would you advise the company to raise the price, lower the price, or to keep the price the same? Include one example relevant to the question from the outline with your response.
  • What if the elasticity were 0.6?
  • What if it were 1?
  • Explain each of your answers to the above and include one example for each response above.