Diamond Company has three product lines, A, B, and C. The following financial information is available:

Item	Product Line A				Product Line B				Product Line C
Sales	$	30,000			$	45,000			$	12,000
Variable costs	$	18,000			$	24,000			$	7,500
Contribution margin	$	12,000			$	21,000			$	4,500
Fixed costs:
Avoidable	$	4,500			$	9,000			$	3,000
Unavoidable	$	3,000			$	4,500			$	2,000
Pre-tax operating income	$	4,500			$	7,500			$	(500	)

Diamond is thinking of dropping Product Line C because it is reporting an operating loss. Assuming the company drops Product Line C and does not replace it, pre-tax operating income for the firm will likely:

• Increase by $1,500

• Decrease by $1,500

• Decrease by $2,700

• Be unchanged

• Increase by $1,200