The following particulars are given: current unit price, ₹1,000; unit variable cost, ₹500; fixed costs, ₹30 lakh.

The following two suggestions are under the consideration of the management of an industrial company:

(a) 10 per cent reduction in price to yield an increase in sales volume from 6,600 to 7,900 units

(b) 10 per cent increase in price with decrease in volume of sales from 6,600 to 5,700 units.

Prepare a statement comparing gross revenue, profit contribution and P/V ratio of these two alternatives with the present results. Which suggestion would you recommend?