Tex-House builds and sells houses for $200,000 each. The firm's fixed costs are $3,000,000, and 50 houses are sold annually with profits totaling $2,000,000. The firm considers changing its production process by investing an additional $4,000,000 and $1,000,000 in fixed costs. This change would reduce variable costs by $30,000 and increase output by 30 units. To support sales of the new output, prices would be lowered by $20,000 per unit.

a) Should the firm make the change?
b) At the new production level, what price would make profits zero?
c) Will the new production situation expose the firm to more or less risk?