An artisanal coffee roastery currently sells 18,000 18,000\,18,000 bags of coffee beans per year at a price of £12.50\text{£}12.50£12.50 per bag. The variable cost per bag is £4.50\text{£}4.50£4.50, and annual fixed costs are £85,000\text{£}85,000£85,000. The roastery is considering lowering the price to £11.00\text{£}11.00£11.00 per bag, which is predicted to increase sales volume by 20%.
What is the predicted change in the roastery's annual profit if this price change is implemented?
An increase of £12,600\text{£}12,600£12,600
A decrease of £3,600\text{£}3,600£3,600
An increase of £3,600\text{£}3,600£3,600
A decrease of £12,600\text{£}12,600£12,600
