-nnis Products, Inc., produces three models of high-quality tennis rackets. The following table contains recent Information on the sales, costs, an: otebillty of the three models: Average Quantity Current Total Variable Cost Contribution Margin Contribution Bold Price Revenu- Per Unit Per Unit Harglni' Model (onus/Month) (a) (s) m (S) (S) A 15,000 30 450,000 15.00 15 225,000 B 5,000 35 175,000 13.00 17 85,000 C 10 ,000 45 450,000 20.00 25 250,000 Total $1,035,000 $560,000 :ontrlbutlon to fixed costs and prou. Ie company Is considering lowering the price of Model A to $2? in an effort to Increase the number of units sold. Based on the results of prloe Ianges that have been Instituted In the past, Tennis Products' chief economist estimates the arc price elasticity of demand to be -2.5. Furthermor Ie estimates the arc cross elasticity of demand between Model A and Model B to be approximately 0.5 and between Model A and Model C to be uproxlmetely 0.2. Variable costs per unit are not expected to change over the anticipated changes In volume. re proposal to cut the price of Model A to $27 would v the total revenue from Model A from $450,000 to I$ . The untrlbutlon margin of Model A wouid v . we consider the entire line of tennis rackets. The price cut would 7 the total revenue from $1,075,000 to and v the contribution margin from $560,000 to - Based on this analysis, the firm 7 lower the price of idle! A