Firms with high operating leverage tend to make more from in


Firms with high operating leverage tend to make more from increasing sales than similar firms with low operating leverage.

Solution

Yes it is true.

High operating leverage means low variable costs and high fixed cost, so when the sales volume increases, the fixed cost will be met, after that as there is less variable cost so we make more profit.

Where as low operating leverage means, high variable costs and low fixed costs

 Firms with high operating leverage tend to make more from increasing sales than similar firms with low operating leverage.SolutionYes it is true. High operatin

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