Allegheny Products has made a profit of 5% - 10% on sales for most of the last 15 years. In 2012, however, the firm began pricing its products lower than normal to meet growing competition from new producers in the area and abroad. Thus, Allegheny Products actually incurred a loss in 2012 of $50,000. A competitor of Allegheny Products filed suit under Federal Antitrust laws alleging that Allegheny Products had engaged in predatory pricing in violation of the law. Use the information in Table 14.1 to answer the questions that follow. Table 14.1. Allegheny Products Income Statement For the Year Ended 12/31/12 Ending Balance Description Sales (10,000 units) Cost of goods sold (40% fixed costs) Gross margin Operating expenses: Marketing (20% fixed costs) Administrative (80% fixed costs) Total operating expenses Net income (loss) for the year $250,000 300,000 $1,000,000 500,000 500,000 550,000 $(50,000)