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For Q = 100 carpets, operating income under both Option 1 and Option 2 = $10,000. For Q > 100, say, 101 carpets, Option 1 gives operating income = ($150 ( 101) ( $5,000 = $10,150. Option 2 gives operating income = $100 ( 101 = $10,100. So Color Rugs will prefer Option 1. For Q < 100, say, 99 carpets, ................
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