If Company a Has a Higher Degree of Operating Leverage

question 125

Multiple Choice

If company A has a higher degree of operating leverage than company B,then which of the following statements is true?

• A) Company A has higher variable expenses.
• B) Company A's profits are more sensitive to percentage changes in sales.
• C) Company A is more profitable.
• D) Company A is less risky.

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Definitions:

Deep Structure

In linguistics, the underlying syntactic structure or meaning of a sentence, as opposed to its surface structure or actual spoken form.

Surface Structure

A concept in linguistics referring to the outward form of a sentence, as opposed to the deeper meaning or abstract structural representation (deep structure).

Transformational Grammar

A linguistic theory that focuses on how sequences of words can be transformed into sentences, emphasizing the rules and principles behind sentence structure.

Bonobos

A species of great ape known for its peaceful behavior and matriarchal societies, closely related to chimpanzees.