To find the first year that sales fell below $50,000, we need to solve for x when y = $50,000.
Given the model: y = 85 - 13.254x
We set y = 50:
50 = 85 - 13.254x
Now, we solve for x:
13.254x = 85 - 50
13.254x = 35
x = 35 / 13.254
x ≈ 2.64
Since x represents the number of years after 2001, to find the actual year, we need to add 2001 to the value of x:
2001 + 2.64 ≈ 2003.64
Rounded to the nearest whole number, this gives us 2004.
So, the first year that sales fell below $50,000 was 2004. Therefore, the answer is option c. 2004.