If ticket prices were decreased by 10%, passenger flights would increase by 25%. However, total variable costs would increase by the same percentage as passenger flights. (1) How much would net income be impacted by this change?

Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month's activity in the form of a cost-volume-profit income statement. Fare revenues (400 passenger flights) Variable costs $56,000 Fuel Snacks and drinks Landing fees Supplies and forms $18,640 720 2,000 1,600 22,960 33,040 Contribution margin Fixed costs Depreciation Salaries Advertising Airport hanger fees 2,950 13,022 600 1,600 18,172 $14,868 Net income