When a Firm Increases Its Degree of Operating Leverage by Substituting

question 80

True/False

When a firm increases its degree of operating leverage by substituting fixed costs for variable costs,it normally does so to decrease its breakeven point and to increase its profit.

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Definitions:

Public Saving

The portion of national saving that is accumulated by the government sector, often reflected as the difference between government revenues and expenditures.

National Saving

The total amount of savings generated within a country, which is the sum of private savings by households and businesses plus public savings from the government’s budget.

Tax Revenue

Tax revenue is the income gained by governments through taxation, a primary source of income used to fund public services and obligations.

National Saving

The total amount of savings generated within a country, consisting of both private savings by households and public savings by the government.