The total cost in dollars of producing x units of a certain product is 100,000 + 5x andminus; x^2/100,000. The number of units that are sold is 130,000 andminus; 10,000p, where p is the selling price of a unit. Gross profit is the difference between sales revenue and cost. What is the change in gross profit that would result from reducing the sales price from $9 per unit to $8 per unit if, at each price, the number of units sold is the same as the number produced?a)$10,000 decreaseb)$1,000 decreasec)$1,000 increased)$10,000 increasee)$25,000 increaseCorrect answer is option 'B'. Can you explain this answer?

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The total cost in dollars of producing x units of a certain product is 100,000 + 5x − x^2/100,000. The number of units that are sold is 130,000 − 10,000p, where p is the selling price of a unit. Gross profit is the difference between sales revenue and cost. What is the change in gross profit that would result from reducing the sales price from $9 per unit to $8 per unit if, at each price, the number of units sold is the same as the number produced?

a)
$10,000 decrease
b)
$1,000 decrease
c)
$1,000 increase
d)
$10,000 increase
e)
$25,000 increase

Correct answer is option 'B'. Can you explain this answer?

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The total cost in dollars of producing x units of a certain product is...

When p = 9
Units sold = 130000 - 90000 = 40000
Revenue = 9(40000) = 360000
Cost = 100000 + 5(40000) - 1600000000/100000 = 100000 + 200000 - 16000 = 284000
Profit = 360000 - 284000 = 76000
When p=8
Units sold = 130000 - 80000 = 50000
Revenue = 8(50000) = 400000
Cost = 100000 + 5(50000) - 2500000000/100000 = 100000 + 250000 - 25000 = 325000
Profit = 400000 - 325000 = 75000
Profit decreased by 1000.

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