Define Operating Leverage

question 111

Essay

Define operating leverage. Explain the relationship between a company's operating leverage and how a change in sales is expected to impact profits.

---

Definitions:

Special Interest Groups

Organizations or groups of individuals that advocate for specific political or policy goals.

Import Goods

Products brought into a country from abroad for sale, typically to meet domestic demand for goods that are not produced locally.

Quotas

Limitations set by a government on the amount of a specific good that can be imported or exported during a specified time frame, often used to protect domestic industries.

Reducing Imports

A strategy aimed at decreasing the volume of goods and services a country buys from abroad, often to support domestic production.