If a Company Would Like to Increase Its Degree of Operating

question 119

Multiple Choice

If a company would like to increase its degree of operating leverage it should ________.

• A) increase its sales relative to its fixed costs
• B) increase its sales relative to its variable costs
• C) increase its variable costs relative to its fixed costs
• D) increase its fixed costs relative to its variable costs

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Definitions:

Lemons

In economics, it refers to low-quality or flawed products that are difficult to identify prior to purchase, notably used in the context of the used car market.

BMW Convertible

A type of luxury vehicle produced by BMW, characterized by a retractable roof, combining performance with the pleasure of open-air driving.

Guarantee

A formal assurance or promise, typically provided by a manufacturer or a seller, that certain conditions such as quality or lifespan of a product will be met.

Low-Quality Sets

Products or groupings of items characterized by inferior materials, craftsmanship, or performance standards.