An eco-adventure theme park sells an all-inclusive day pass for £108, which includes standard VAT at 20%. The park's monthly fixed operating costs are £650,000, and it consistently sells 18,000 day passes each month.
In an effort to boost the green tourism sector, the government announces a temporary reduction in the VAT rate for eco-tourism attractions from 20% to 8%. If the park maintains its gross ticket price of £108 and sales volume remains unchanged, what is the impact on its monthly profit?
Increases by £233,280
Increases by £194,400
Increases by £180,000
Remains unchanged
