Mod Clothiers makes womens clothes. It costs $28 000 to produce 5 000 pairs of polka-dot polyester pants. They have been unable to sell the pants at their usual price of $50.00. The company is evaluating two alternatives. They could sell the pants as is for a total $15,000 or they could modify the pants at a cost of $3,000 and sell them for a total of $20,000.

a) The change in net income resultng from modifying the pants and then selling as opposed to selling "as is" would be a(n)

b) Assume all conditions remained the same except the cost to modify the pants ($3,000). At what cost to modify each pair of pants would Mod Clothiers be indifferent between the two alternatives?