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A Firm That Has Total Fixed Costs of $40,000 Sells

Question 2

Multiple Choice

A firm that has total fixed costs of $40,000 sells its output for $250 per unit and has an average variable cost of $150. If the firm's cost and revenue curves are linear and output is equal to 500 units, what is the firm's degree of operating leverage?


A) 5
B) 4
C) 3
D) None of the above is correct.

Correct Answer:

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