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Claire's Cakes is considering a special discount on cupcakes for a week, reducing the price from $2.50 to $2.00. Promotion costs $600. Claire expects cupcake

Claire's Cakes is considering a special discount on cupcakes for a week, reducing the price from $2.50 to $2.00. Promotion costs $600. Claire expects cupcake sales to increase by 25%, with a 10% drop in cookie sales. The weekly data are:

Product

Sales Price

Variable Costs

Sales Volume

Cupcakes

$2.50

$1.25

1000

Cookies

$1.50

$0.75

800

Requirement: Evaluate the impact on profits and provide a recommendation.

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