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Problem 1: Morgan Technologies sells a single product at $25 per unit. The firm's most recent income statement revealed unit sales of 94,000, variable costs of $752,000, and fixed costs of $510,000. If a $5 drop in selling price will boost unit sales volume by 20%, the company will experience: Option 1: no change in profit because a 20% drop in sales price is balanced by a 20% increase in volume. Option 2: an $69,280 drop in profit. Option 3: a $244,400 drop in profit. Option 4: a $510,000 drop in profit. Option 5: None of the answers is correct.
Which of the following represents the excess of the selling price per unit of a product over the variable cost of obtaining and selling each unit?
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