Economists Refer to Knowledge "Spillovers" as Externalities, and There Is

question 89

True/False

Economists refer to knowledge "spillovers" as externalities, and there is a well-established theory suggesting that firms can benefit from such externalities by locating close to their source.

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Definitions:

Operating Leverage

An indicator of the extent to which increases in sales revenue result in an increase in operating profit, showing the level of fixed expenses within a business's cost composition.

Sales Impact

The effect of marketing and sales activities on the volume or value of product sales.

Margin of Safety

The difference between actual sales and break-even sales, indicating the extent to which sales can drop before losses occur.

Variable Costs

Costs that vary directly with the level of production or volume of output.