Based on the Example in the Textbook, the Calculation Below $\frac{\text {Percent change in operating income }}{\text {Percent change in unit volume }}$

question 78

True/False

Based on the example in the textbook, the calculation below is of a conservative firm.
DOL = $\frac{\text {Percent change in operating income }}{\text {Percent change in unit volume }}$ = $\frac { \frac { \$ 24,000 } { \$ 36,000 } \times 100 } { \frac { 20,000 } { 80,000 } \times 100 }$ = $\frac { 67 \% } { 25 \% }$ = 2.7

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Definitions:

Price Ranges

The spectrum of prices at which a particular good or service is sold in the market.

Equilibrium

A state where supply and demand are balanced, and in the absence of external influences, the values of economic variables will not change.

Total Revenue

The total receipts from sales of goods or services before any expenses are deducted.

Price

The amount of money required to purchase a product or service, set by the interaction of supply and demand.