The Degree of Operating Leverage Is Computed by Dividing Sales

question 22

True/False

The degree of operating leverage is computed by dividing sales by the contribution margin

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Definitions:

Monopolistic Competitor

A firm operating in a market structure characterized by many sellers offering differentiated products, which are similar but not perfect substitutes.

Long Run

The Long Run is a period in which all factors of production and costs are variable, allowing all inputs to be adjusted.

Price Discrimination

A pricing tactic in which a provider offers the same or similar services or goods at different price points in various markets.

Arbitraging

The practice of buying and selling the same asset in different markets to profit from price differences.