Answer the Following Questions Using the Information Below:
Contrafic Lighting

question 4

Multiple Choice

Answer the following questions using the information below:
Contrafic Lighting manufactures small flashlights and is considering raising the price by 75 cents a unit for the coming year. With a 75-cent price increase, demand is expected to fall by 7,000 units.
$$\begin{array} { l r r } & \text { Current } & \text { Projected } \\\text { Demand } & 75,000 \text { units } & 68,000 \text { units } \\\text { Selling price } & \$ 8.50 & \$ 9.25 \\\text { Incremental cost per unit } & \$ 4.80 & \$ 4.80\end{array}$$
-If the price increase is implemented,operating profit is projected to ________.

• A) increase by $25,100
• B) decrease by $5,250
• C) increase by $5,250
• D) decrease by $7,000

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