Question $19$

Sierra Nevada mountain gear sells $1$ million $1-$person tents per

year at $$265$ each. Production and distribution costs $$91$ per

tent. They are considering producing a $2-$person tent that will

cost $$160$ to produce and distribute. Then believe they can sell

$600,0002-$person tents per year at a price of $$404$ each. If they

introduce the $2-$person tent, they estimate that sales of the $1-$

person tents will decline by $200,000$ units per year. What is the

annual erosion cost from the $2-$person tent?