Erosion costs. Fat Tire Bicycle Company currently sells 37,000 bicycles per year. The current bike is a standard balloon-tire bike selling for $120, with a production and shipping cost of $25. The company is thinking of introducing an off-road blike with a projected selling price of $410 and a production and shipping cost of $250. The projected annual sales for the off-road bike are 13,000 . The company will lose sales in fat-tire bikes of 8,500 units per year if it introduces the new bike, however. What is the erosion cost from the new bike? Should Fat Tire start producing the off-road bike