The New Product Would Require an Investment of $1,200,000 on Which

question 77

Multiple Choice

The new product would require an investment of $1,200,000 on which the company would like to earn a return of 22 percent. The markup using the absorption costing approach would be:

• A)93.8%
• B)32.6%
• C)71.3%
• D)57.5%

---

Definitions:

Long-Run Equilibrium

A state in which all firms in a market or industry are making normal profits and there is no incentive for firms to either enter or exit the market.

Price

The monetized value required, forecasted, or offered in return for a service or good.

Marginal Cost

The increase in total cost that arises from an extra unit of production, focusing on the cost variation from an additional output.

Marginal Revenue Curve

A graphical representation that shows how additional sales revenue changes with each extra unit of output sold.