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Victory Tire Company makes a special kind of racing tire. Variable costs are $ 2 2 0 per unit, and fixed costs are $ 2
Victory Tire Company makes a special kind of racing tire. Variable costs are $ per unit, and fixed costs are $ per month. Victory sells units per month at a sales price of $ If the quality of the tire is upgraded, the company believes it can increase the sales price to $ If so the variable cost will increase to $ per unit, and the fixed costs will remain the same. If Victory decides to upgrade, how will it affect operating income?
A
Operating income will increase by $
B
Operating income will increase by $
C
Operating income will decrease by $
D
Operating income will decrease by $
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