What Do Constant Returns to Scale Imply

question 37

Essay

What do constant returns to scale imply?

Calculate the sales level required to achieve a target profit.

Interpret and calculate the degree of operating leverage and its impact on net operating income.

Analyze the effects of pricing and advertising changes on the break-even point and net operating income.

Interpret financial data and perform contribution margin analysis.

---

Definitions:

Geographic Segmentation

Segmentation that divides markets into groups such as nations, regions, states, and neighborhoods.

Customer Lifestyles

refers to the way a customer lives, including activities, interests, opinions, and demographic characteristics, and how these factors influence their buying behavior.

Population Shifts

Changes in the size, location, age, or composition of a population over time.

Substantial

Of considerable importance, size, or worth; something that is significant or heavily built.