Firm a Employs a High Degree of Operating Leverage; Firm

question 53

Multiple Choice

Firm A employs a high degree of operating leverage; Firm B takes a more conservative approach. Which of the following comparative statements about firms A and B is true?

• A) A has a lower break-even point than B, but A's profit grows faster after the break-even.
• B) A has a higher break-even point than B, but A's profit grows slower after the break-even.
• C) B has a lower break-even point than A, but A's profit grows faster after break-even.
• D) B has a lower break-even point than A, and profit grows the same rate for both companies after the breakeven point.

---

Definitions:

Basic Emotions

Fundamental emotions experienced by humans, such as happiness, sadness, fear, disgust, surprise, and anger, believed to be universal across cultures.

Facial Expressions

The voluntary and involuntary movements of the face that convey emotions, thoughts, and feelings to others.

Early Childhood

A developmental period in human life ranging from birth to around 8 years old, marked by rapid physical, cognitive, and emotional growth.

Right Frontal Lobe

A region of the brain associated with decision making, problem-solving, impulse control, and social interactions.