Music Inc. has been selling music DVDs for 10 years and now wants to enter the Movie DVD business. They have entered a deal with paramount pictures to sell on DVD all of their future and past movies. The accounting department has estimated the cost of the DVD, Packaging, and Copyright fees for each DVD to be $5.00. The fixed cost for machinery, buildings & grounds, and overhead to be $30,000 per year. If Music Inc. sells each DVD for $20.00, how many DVDs must they sell to break even? Next, if Music Inc. sells 18,000 DVDs per year at a price of $20.00 what is their profit? Finally, if Music Inc. instead decides to lower the selling price per DVD by 10% ($18.00) and projects they will sells 10% more in that year (19,800), what is their profit? What conclusion can you draw about lowering prices in the market by 10% (hint how many more units must be sold to recover the profit lost from selling at a 10% lower price)?