A Company with a Degree of Operating Leverage of 4

question 66

True/False

A company with a degree of operating leverage of 4 would expect income to increase by 200% if sales increased from $100,000 to $150,000.

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Definitions:

Marginal Social Benefit

The extra advantage that the entire society gains from using an additional unit of a product or service.

Public Good

A product that is non-excludable and non-rivalrous in consumption, meaning it is available to all members of society without depletion.

Nonrival

Refers to a good where one person's use does not reduce the amount available for others.

Nonexcludable

A characteristic of goods where it is difficult or impossible to prevent people from using the good once it has been provided.