Meson Productions Is a Price-Taker

question 72

Multiple Choice

Meson Productions is a price-taker.It produces large spools of electrical wire in a highly competitive market,so it practices target pricing.The current market price of the electric wire is $780 per unit.The company has $3,000,000 in assets and its shareholders expect a return of 6% on assets.The company provides the following information: If variable costs cannot be reduced,how much reduction in fixed costs will be needed to achieve the profit target?

• A)$4,180,000
• B)$12,000,000
• C)$7,820,000
• D)$4,200,000

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Definitions:

Contrapositive

In logic, it involves reversing and negating both the hypothesis and conclusion of a conditional statement.

Disjunctive Proposition

A statement that presents two or more alternatives, where the truth of at least one alternative means the proposition is true.

False

not true or correct; an assertion that contradicts fact or reality.

Disjunctive Syllogism

A form of logical argument where the conclusion is inferred from the truth of one proposition leading to the falsity of another.