A food court at Lisbons main rail station sells sandwiches, snacks and beverages. It has been estimated that on average, 170,000 rail transit customers per day use the station and that 10% of these customers make a purchase at the food court. Other information:

The food court is open 360 days a year for 14 hours per day.

The average customer spend at the food court is 3.50.

The average cost of sales for each customer purchase is 1.95.

Rent paid is 20% of monthly sales revenue and other variable costs run at 9% of revenue.

Salaries and wages cost are 1,215,000 per year, and operating expenses are 315,000 annually.

The cost of sales is expected to rise by 2% at the start of next year.

The food court manager is considering the following two pricing options for the forthcoming year:

Option 1: Do nothing.

Option 2: Increase prices and hence spend by an average of 0.60. It is estimated that this price increase would reduce the number of customers by 20% but would save 150,000 in wages per year.

Required

Determine which pricing option is preferable.