A company invests $20 million in order to produce and market handbags, and they estimate that with demand for handbags being what it is, they can sell 30,000 handbags. Further, from preliminary production data they know that at that level of output their average total cost (ATC) is $100 per handbag. Total annual costs would be $3 million (30 thousand units at $100 each). Next, management decides they want a 25% return on investment (ROI). That works out to be $5 million (25% of a $20 million investment).

Investment =20,000,000

Demand = 30,000

Cost = $100

Annual costs = 3,000,000

20% return = 5,000,000

What is the Profit Margin and Price?