Describe the Two Basic Factors That Account for Greater Market

question 39

Essay

Describe the two basic factors that account for greater market similarities among industrial goods customers than among consumer goods customers.

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Definitions:

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed to variable costs.

Fixed Costs

Costs that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance.

EBIT

Earnings Before Interest and Taxes, also known as EBIT, is a way to evaluate a company's profit without considering tax and interest expenses.

Financial Risk

The likelihood of experiencing a loss of money in a business operation or investment.