In early 2012, Starbucks increased the prices for some of its tasty beverages in parts of northeastern and southern US states. Some people thought the price increase would hurt Starbucks, but most business analysts agreed that the price increase would not hurt decrease the coffee company's revenues.

What would have to be true for the analysts to be correct? Explain.

As in the above-mentioned when Starbucks raises its the price level of the some of its special and tasty beverages in some parts of the United States than the such a market strategy by the managers is expected to result in a positive manner for the company in the form of higher total revenue level. Although the degree of alteration in the total reminder level in response to the price level correlate highly with the elasticity of demand and supply for that particular product in the market. Therefore as in this case, the company only alters the price level of its popular, special, tasty items i.e. These products have a lower elasticity of demand and hence an increase in the price level of such products result in a higher total revenue level to the company.