Question: Dana sells a single product at $20 per unit. The firm's most recent income statement revealed unit sales of 100,000, variable costs of $800,000, and

Dana sells a single product at $20 per unit. The firm's most recent income statement revealed unit sales of 100,000, variable costs of $800,000, and fixed costs of $400,000. If a $4 drop in selling price will boost unit sales volume by 20%, the company will experience:

No change in profit because a 20% drop in sales price is balanced by a 20% increase in volume.

An $80,000 drop in profitability.

An $240,000 drop in profitability.

a $400,000 drop in profitability.

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