It's probably more mundane than that.

Let's say Mars sells the bars to distributors for 20 cents and it costs 10 cents a bar to make and package.

A pound of milk chocolate costs $5 and you can get 250 bars out of it. Meaning, every bar has 2 cents of chocolate.

Chocolate prices go up to $6/pound. Now, every bar has 2.4 cents of chocolate. You can maybe eat that cost. Depending on the price increase of other ingredients. Eventually, chocolate hits $10/lb and you are spending 4 cents per bar on chocolate.

You can increase your price, OR you can use less chocolate per bar. You can slightly shrink the dimensions of every bar and use a thinner layer of chocolate to get your costs back in line with 2 cents per bar.

Everyone is going to notice your prices increasing. Fewer people are going to notice your sizes decreasing.