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Answer the Following Questions Using the Information Below

question 44

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Answer the following questions using the information below:
Holly's Ham, Inc. sells hams during the major holiday seasons. During the current year 11,000 hams were sold resulting in $220,000 of sales revenue, $55,000 of variable costs, and $24,000 of fixed costs.
-If sales increase by $40,000, operating income will increase by:


Definitions:

Aggregate Demand Curve

A graphical representation showing the relationship between the overall price level and the total demand for goods and services in an economy.

Marginal Propensity

The proportion of an additional income that an individual spends on consuming goods and services, rather than saving.

Consumption Function

An economic formula representing the relationship between total consumption and gross national income, suggesting how income influences spending behavior.

Aggregate Demand Curve

A graphical representation that shows the total quantity of goods and services that all households, businesses, and government are willing to purchase at each possible price level.

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