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31. Product Cannibalism problem (4 points): A toothpaste manufacturer is concerned about a competitor introducing a new flavored toothpaste and in anticipation of that has decided to do a line extension of its product Breath-Fresh. The new line extension will be called Peppermint Breath- Fresh. Breath-Fresh currently sells 50,000 tubes of toothpaste per year. It is calculated from research that Peppermint Breath-Fresh will sell 70,000 tubes per year of which 20,000 will be cannibalized from Breath-Fresh. The following are the relevant selling price and costs of each. Should the company introduce the new toothpaste based on their requirement for all new products to generate additional gross profit in their first year. Additional fixed costs to produce Peppermint Breath-Fresh will be $30,000. Product Selling Price Variable Costs Breath-Fresh Peppermint Breath - Fresh $3.50 $4.00 $1.50 $2.00