Use the Information Below to Answer the Following Question(s)

question 49

Multiple Choice

Use the information below to answer the following question(s) .Block Island TV currently sells large televisions for $360.It has costs of $280.A competitor is bringing a new large television to market that will sell for $300.Management believes it must lower the price to $300 to compete in the market for large televisions.Marketing believes that the new price will cause sales to increase by 10%, even with a new competitor in the market.Block Island TV sales are currently 100,000 televisions per year.
-What is the change in operating income if marketing is correct and only the sales price is changed?

• A)$2,200,000
• B)$600,000
• C)$(2,200,000)
• D)$(5,800,000)
• E)$(1,900,000)

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Definitions:

Consumption

The act of using goods and services by households or individuals, typically regarded as a primary economic activity.

Production

Production involves the process of creating, manufacturing, or enhancing goods and services.

Consumer Savings

Refers to the amount of money that individuals set aside from their disposable income rather than using it for consumption.

Financial Rewards

Monetary benefits given to employees or stakeholders as an incentive or recognition for their performance or investment.