The Western Clothing Company produces denim jeans. The company incurs the following monthly costs to produce denim jeans: fixed cost = $10,000 and variable cost = $ 8 per pair.

A. Currently the company sells 400 pairs monthly at a price o f $23 per pair. Find the company's current profit (or loss)

B. Western is considering two alternatives: n Alternative 1: lower price to $20 per pair; then the estimated demand is 1,000 pairs per month. n Alternative 2: Keep price at $23 but spend $2,000 on advertisement then the estimated demand is 950 pairs per month. Which alternative yields a higher profit?

C. If demand turns out to be 820, which alternative will be a better choice?