Tapp Corporation produces and sells a single product. Data concerning that product appear below: 
Fixed expenses are $226,000 per month. The company is currently selling 2,000 units per month.
Required:
The marketing manager would like to cut the selling price by $12 and increase the advertising budget by $13,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 200 units. What should be the overall effect on the company's monthly net operating income of this change? Show your work!
Definitions:
Fiscal Policy
Government strategies for adjusting its spending levels and tax rates to influence a nation's economy.
Budget Deficits
A financial situation where a government's expenditures surpass its revenues within a specific period.
Government Expenditures
The total amount of money spent by the government in a particular period, including spending on goods, services, and public projects.
Hoover Administration
The U.S. presidential administration of Herbert Hoover, serving from 1929 to 1933, noted for its handling of the early stages of the Great Depression.
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