Company X Has Net Sales Revenue of $780,000,cost of Goods

question 110

Multiple Choice

Company X has net sales revenue of $780,000,cost of goods sold of $343,200,and all other expenses of $327,600.The net profit margin is:

• A)0.32
• B)0.56
• C)0.86
• D)0.14

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Definitions:

Consumer Surplus

The difference in the amount consumers would ideally pay for a service or good versus what they really spend.

Producer Surplus

The imbalance between the desired compensation by producers for a good or service and the real income they secure.

Binding Price Ceiling

A government-imposed limit on the price of a commodity or service that is set below the market equilibrium price, causing a shortage.

Binding Price Floor

A government-imposed price control set above the equilibrium price, causing a surplus by forcing the price to be higher than what the market would naturally set.