Final answer:
Managers have more influence on consumer demand with strategies when demand is elastic. They can adjust prices and expect significant changes in demand due to the product's high sensitivity to price changes. In contrast, strategies may be less effective when the demand is inelastic as price changes do not significantly influence demand.
Step-by-step explanation:
Managers can raise or lower consumer demand through various strategies if demand for a product or service is elastic. Elastic demand indicates a high responsiveness to changes in price. Conversely, when demand is inelastic, consumer demand does not change significantly with price adjustments because the product is often seen as a necessity. When costs of key inputs rise, firms may pass these costs on to consumers if demand is inelastic, as seen with addictive substances. The price elasticity of demand is crucial in determining whether higher costs can be transitioned into higher prices for consumers or if the market will compel businesses to pass along production savings in the form of lower prices.