Morning Sky$,$ Incorporated $($MSI$),$ manufactures and sells computer games. The company has several product lines based

on the age range of the target market. MSI sells both individual games as well as packaged sets. All games are in CD

format, and some utilize accessories such as steering wheels, electronic tablets, and hand controls. To date, MSI has

developed and manufactured all the CDs itself as well as the accessories and packaging for all of its products.

The gaming market has traditionally been targeted at teenagers and young adults; however, the increasing affordability of

computers and the incorporation of computer activities into junior high and elementary school curriculums has led to a

significant increase in sales to younger children. MSI has always included games for younger children but now wants to

expand its business to capitalize on changes in the industry. The company currently has excess capacity and is

investigating several possible ways to improve profitability.

MSI's educational products currently are sold without any supplemental materials. The company is considering the inclusion of

instructional materials such as an overhead slide presentation, potential test questions, and classroom bulletin board materials for

teachers. A summary of the expected costs and revenues for MSI's two options follows:

Required:

Based on the given data, compute the increase or decrease in profit that would result if instructional materials were added to the

CDs$.$

Should MSI add the instructional materials or sell the CDs without them?

$3-$a$.$ Suppose that the higher price of the CDs with instructional materials is expected to reduce demand to $20,000$ units. Complete the

table given below based on this scenario.

$3-$b$.$ Should MSI add the instructional materials or sell the CDs without them?

Complete this question by entering your answers in the tabs below.

Req $1$

Req $2$

Req $3B$

Based on the given data, compute the increase or decrease in profit that would result if instructional materials were added to

the CDs$.$