Introduction of the term Operating Leverage
Give a brief introduction of the term Operating Leverage?
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It is a leverage that refers to the improvement of profits since there is a fixed operating cost that is involved with each component. When the sales raises fixed cost does not raise and it results in higher profits. Higher fixed expenditures results in higher operating leverages that leads to higher business risks.
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Who owns the factors of production and the method used to coordinate economic activity?
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