The Creative Division of the Barry Company Reported the Following

question 103

Short Answer

The Creative Division of the Barry Company reported the following results for December:
Invested assets                     $1,200,000
Profit margin                                  25%
Return on investment                      30%
Based on this information, what were sales?

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Definitions:

Producer Surplus

The difference between the actual price a producer receives (or producers receive) and the minimum acceptable price; the triangular area above the supply curve and below the market price.

Purely Competitive Market

A market structure characterized by a large number of small firms, identical products, and free entry and exit, which leads to firms being price takers.

Long-run Equilibrium

A state in which all firms in an industry are making normal profit, with no incentive for new firms to enter or existing firms to leave the market.

Producer Surplus

The difference between what producers are willing to accept for a good or service and the actual price they receive, representing economic gain.