A Firm Has a DOL = 2

question 38

Multiple Choice

A firm has a DOL = 2.5. If sales decrease by 20%, then OCF will ____________.

• A) decrease by 20%
• B) increase by 5%
• C) increase by 20%
• D) decrease by 12.5%
• E) decrease by 50%

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Definitions:

Total Wage Bill

The total amount of money paid by an employer to its employees as wages.

Domestic Output

The total value of all goods and services produced within the borders of a nation over a specific period of time.

Pre-migration

The period or processes occurring before the migration of individuals or groups from one place to another.

Immigration

Moving to a different country with the intention of living there on a permanent basis.