Flash City Inc. manufactures small flash drives and is considering raising the price by 75 cents a unit for the coming year. With a 75-cent price increase, demand is expected to fall by 7,000 units.

Current

Projected

Demand

79,000 units

72,000 units

Selling price

$8.50

$9.25

Incremental cost per unit

$5.80

$5.80

If the price increase is implemented, operating profit is projected to ________.

Select one:

A. increase by $5,250

B. decrease by $7,000

C. increase by $35,100

D. decrease by $5,250