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?

Question

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?

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The Answer of 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?

Meson Productions Is a Price-Taker