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Answer the following questions using the information below:
Cairns Company has invested $2 000 000 in a plant to make spear guns for fishing.The target operating profit desired from the plant is $300 000 annually.The company plans annual sales of 1500 spear guns at a selling price of $2000 each.
-What is the mark-up percentage as a percentage of cost for Cairns Company?
Marginal Cost
The incremental cost involved in producing an additional unit of a product or service.
Natural Monopolist
A single supplier in a market that can supply the entire market at a lower cost than any combination of two or more suppliers.
Socially Efficient
A situation in which a market or economy allocates resources in a way that maximizes the overall welfare of society.
Natural Monopolist
A company that can provide goods or services at a lower cost than any competitors can, due to economies of scale, often leading to a monopoly in the market.
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