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Two Firms,A and B,both Produce Widgets

question 5

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Two firms,A and B,both produce widgets.The price of widgets is $1 each.Firm A has total fixed costs of $500,000 and variable costs of 50 cents per widget.Firm B has total fixed costs of $240,000 and variable costs of 75 cents per widget.The corporate tax rate is 40%.If the economy is strong,each firm will sell 1,200,000 widgets.If the economy enters a recession,each firm will sell 1,100,000 widgets.Calculate firm B's degree of operating leverage.


Definitions:

J1939

Hardware and software multiplexing data bus protocols required for medium- and heavy-duty truck, and most off-road equipment; built on CAN 2.0 architecture using a serial, twisted wire pair.

Diagnostic Codes

Codes generated by a vehicle's onboard diagnostics system indicating specific issues or malfunctions within the vehicle's systems.

Controller

Widely used term for control module. Anything on the data bus that can be assigned source address (SA) or message identifier (MID) status, meaning that it has some processing and networking capability.

Data Bus

A communication system within a computer or between computers and peripheral devices, designed for data transfer.

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