A recent new article, “A Clunky Mask May Be the Answer to Airborne Disease and N95 Waste,” describes how during the pandemic an incredibly large number of N95 masks were used and disposed of by medical personnel. So-called “elastomeric respirators,” which are a kind of industrial-grade face mask often used by car painters and construction workers also provide at least the same level of protection as N95 masks, with the added benefit that they are reusable for many months or even years. This is because the filtration mechanism, a cartridge, can be swapped out for a new one so that the mask itself remains in service. Cartridges can last up to a year before they need replacement. Suppose a company that produces disposable N95 masks for the medical industry is considering entering the market for elastomeric masks. The reason for this is that the company forecasts that they expect that new mask competitors will take 60 percent of their market share from this point on. If the company does begin to produce elastomeric masks, then it will stop producing and shipping N95 masks, and switch all production to the elastomeric masks. 

Currently, the company sells 50,000,000 N95s per year. The selling price of each is 60 cents, and it costs 10 cents to produce and ship each one. The cost of producing and shipping an elastomeric mask is higher, $3.00, but based on their research, the price point at which they will sell the mask should be $23. The company expects to sell 500,000 masks per year to the same accounts that formerly bought their N95s. The company will also sell 500,000 spare cartridges each year. The contribution margin on the cartridges is $5.00. 

Do you recommend that the company switch production to the new masks? If you do, begin your answer with Switch, and explain why it is superior to the other option. If you do not, then begin your answer with Do Not Switch, and explain why it is superior to the other option. Support your recommendation with the appropriate calculations.