Answer the following questions using the information below:
Block Island TV currently sells large televisions for $360. It has costs of $280. A competitor is bringing a new large television to market that will sell for $300. Management believes it must lower the price to $300 to compete in the market for large televisions. Marketing believes that the new price will cause sales to increase by 10%, even with a new competitor in the market. Block Island TV sales are currently 100,000 televisions per year.
-What is the change in operating income if marketing is correct and only the sales price is changed?
A) $2,200,000
B) $600,000
C) $(2,200,000)
D) $(5,800,000)

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The Answer of Answer the following questions using the information below:
Block Island TV currently sells large televisions for $360. It has costs of $280. A competitor is bringing a new large television to market that will sell for $300. Management believes it must lower the price to $300 to compete in the market for large televisions. Marketing believes that the new price will cause sales to increase by 10%, even with a new competitor in the market. Block Island TV sales are currently 100,000 televisions per year.
-What is the change in operating income if marketing is correct and only the sales price is changed?
A) $2,200,000
B) $600,000
C) $(2,200,000)
D) $(5,800,000)

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