The president of a small company that provides vending machine services asks you, the company's economist, to forecast changes in consumer snack purchases associated with a proposed price change. You conduct a survey and find that if the price of a snack increases from $1.00 to $1.25, the quantity demanded for snacks will decrease from 56 million to 50 million per year.

The company president expects well-written oneortwo short paragraphs with correct grammar, sentence structure, and an accurate understanding of economic issues. Your analysis should include a calculation of the price elasticity of demand using the mid-point formula and provide a recommendation of whether the vending machine company should raise its price of snacks from $1.00 to $1.25 explaining the economic basis for your recommendation.