Pharmalodiagnosticon, an up and coming pharmaceutical company, is thinking of introducing a new product, Sweet Relief, into the crowded OTC market for pain relievers. Its set to be sold to retailers for about seven dollars for a bottle of 250 caplets. It will cost Pharmalodiagnosticon $2 dollars to produce each bottle of pills.

After the initial run, Pharmalodiagnosticon decides to reduce the price of the drug to retailers to $5 a bottle in order to increase sales. Sales for the upcoming quarter were projected to be 900,000 with the existing product price.