The following information pertains to Lilac Company's three products:

	A	B	C
Unit sales per month	1,800	2,800	1,600
Selling price per unit	$3.00	$5.25	$ 3.50
Variable costs per unit	2.00	4.00	3.80
Unit contribution margin	$1.00	$1.25	$(0.30)

Assume that product C is discontinued and the space is used to produce B. Product B's production is increased to 4,000 units per month, but the selling price of all units of B is reduced to $5 per unit. Monthly profits will:

Select one:

a. decrease by $1,000.

b. decrease by $520.

c. increase by $500.

d. increase by $980.