If Q Equals the Level of Output, P Is the Selling

question 136

Multiple Choice

If Q equals the level of output, P is the selling price per unit, V is the variable expense per unit, and F is the fixed expense, then the degree of operating leverage is equal to:

• A)Q/(P-V).
• B)F/(P-V).
• C)F/[(P-V)/P].
• D)[(P-V)Q]/[(P-V)Q-F].

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Definitions:

Supremacy Clause

A provision in the U.S. Constitution stating that federal law takes precedence over state laws.

Supreme Law

The highest form of law in a legal system, to which all other laws must conform; in the United States, this refers to the U.S. Constitution.

Checks and Balances

A system in government designed to prevent any single branch from gaining too much power, allowing each branch to limit or check the powers of the others.

Legislative Branch

The part of the government responsible for creating laws, consisting of elected representatives in many countries.