For Every 1 Percent Decrease in Sales of a Firm

question 56

Multiple Choice

For every 1 percent decrease in sales of a firm, the EBIT decreases by 3.2 percent. What does this statement indicate?

• A) The debt/assets ratio of the firm is 3.2 times.
• B) The degree of operating leverage of the firm is 3.2 times.
• C) The current assets of the firm are 3.2 times its current liabilities.
• D) The expenses of the firm are 3.2 percent of its income.
• E) The degree of financial leverage of the firm is 3.2 times.

Grasp the significance of network externalities and their impact on market dynamics.

Understand the concept of market efficiency and how externalities affect market outcomes.

Identify and evaluate policies for correcting market failures due to externalities, including taxes, subsidies, and tradeable permits.

Analyze the impact of government intervention on market equilibrium, including taxes and subsidies.

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Definitions:

Anti-Racist Approach

A strategy or philosophy that actively opposes racism and promotes racial tolerance and equality.

Racism

Prejudice, discrimination, or antagonism directed against someone of a different race based on the belief that one's own race is superior.

Social Oppression

A systemic phenomenon where certain groups are marginalized, discriminated against, or persecuted based on immutable characteristics.

Gendered Patterns

The ways in which behaviors, roles, and expectations are shaped and differentiated based on gender, often leading to inequalities.