Two Firms, a and B, Both Produce Widgets

question 73

Multiple Choice

Two firms, A and B, both produce widgets. The price of widgets is $1 each. Firm A has total fixed costs of $500,000 and variable costs of 50¢ per widget. Firm B has total fixed costs of $240,000 and variable costs of 75¢ per widget. The corporate tax rate is 40%. If the economy is strong, each firm will sell 1,200,000 widgets. If the economy enters a recession, each firm will sell 1,100,000 widgets. Calculate firm B's degree of operating leverage.

• A) .714
• B) 9.09
• C) 7.86
• D) 7.14

Evaluate the predictive power of emotional intelligence on academic and job performance.

Recognize the influence of prenatal and environmental factors on mental health.

Comprehend the risk factors associated with schizophrenia.

Understand the distinction between different types of schizophrenia symptoms (positive, negative, cognitive).

---

Definitions:

Cash Receipts

The total amount of cash collected by a business during a specific period, including revenues and other income.