Pricing decisions: Total fixed costs are $25,000. Unit variable cost is $20. At current selling price of $50, you sell 1,000 units per month. If you reduce the price by 10%, sale volume will increase to 1,300 units. A.Compute profit at the original price: B. Compute profit at the reduced price: C. Should you reduce the price?

YES, because revenue will increase by $8,500

NO, because a lower price always reduces profit

YES, because profit will increase by $2,500