A company manufactures three products as shown below.It is considering a decision to discontinue the production of product C.Corporate overhead of $60,000 is allocated to each product in equal parts.If the company decides to discontinue product C,50% of its quantity demanded will shift to product A (i.e.,products A and C are substitutes).Product B is neither a substitute nor a complement for product A or product C.

\begin{array}{|l|r|r|r|}\hline &A&B&C\\\hline \text { Unit Price } & \$ 10.00 & \$ 15.00 & \$ 5.00 \\\hline \text { Marginal Cost } & \$ 5.00 & \$ 5.00 & \$ 3.00 \\\hline \text { Quantity Sold } & 10,000 & 2,000 & 3,000 \\\hline \text { Unit Margin } & \$ 5.00 & \$ 10.00 & \$ 2.00 \\\hline \text { Total Margin } & \$ 50,000.00 & \$ 20,000.00 & \$ 6,000.00 \\\hline \text { Overhead Allocation } & \$ 20,000.00 & \$ 20,000.00 & \$ 20,00.00 \\\hline \text { Accounting Profit } & \$ 30,000.00 & \$ 0.00 & -\$ 14,000.00\\\hline\end{array}

The company should:
A)continue producing C because it has a positive unit margin.
B)continue producing C because the substitution effect does not compensate for the loss of profit contribution from product C.
C)discontinue producing C because this decision maximizes the total economic profit contribution generated by the company.
D)discontinue both B and C since neither has a positive contribution to economic profit.

If Sam's,a Local Watering Hole,increased the Price of a Pint

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