Meson Production Is a Price-Taker If Variable Costs Cannot Be Reduced, How Much Reduction in Electrical

question 137

Multiple Choice

Meson Production 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: $$\begin{array} { | l | r |r| } \hline \text { Sales volume } & 100,000 &\text { units per year } \\\hline \text { Variable costs } & \$ 700& \text { per unit } \\\hline \text { Fixed costs } & \$ 12,000,000 &\text { per year } \\\hline\end{array}$$ 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

Understand the characteristics and purposes of formal and informal groups in organizations.

Identify the stages of group development and the features of each stage.

Recognize the impact of group dynamics on individual behavior and group performance.

Understand the role and effect of leadership styles on group development and performance.

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Definitions:

Marginal Product

Represents the additional output that can be produced by adding one more unit of a specific input, keeping all other inputs constant.

Isoquant

A curve that represents all the combinations of inputs that produce the same level of output in the production of goods.

Output

The total amount of goods or services produced by a company, industry, or economy.

Average Educational Level

A metric that represents the average amount of formal schooling completed by a population or specific group of people.