What Does the Operating Ratio Measure

question 15

Multiple Choice

What does the operating ratio measure?

• A) number of seats sold divided by miles operated
• B) operating expense divided by operating income
• C) stock share price divided by the total number of shares outstanding
• D) number of airplanes in the fleet divided by miles flown by type

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Definitions:

Industry Supply Curve

A graphical representation that shows the quantity of goods that producers are willing and able to sell at different price levels in a specific industry.

Variable Costs

Costs that vary directly with the level of production, such as materials and labor.

Long Run

A period of time in economics during which all factors of production and costs are variable.

Apple Orchard

An agricultural area dedicated to the cultivation of apple trees for the purpose of producing apples.