Answer: Schlictor's operating leverage when 2000 units are sold is 3.
The degree of operating leverage is used to calculate the change in operating income with respect to a percentage change in sales.
We can calculate operating leverage of a firm with the help of the following formula:
Substituting the values from the question we get
![Degree of operating leverage = \frac{(50 * 2000) - (50*0.40*2000)}{[50*2000] - [(50*0.4*2000) + 40000]}](https://tex.z-dn.net/?f=Degree%20of%20operating%20leverage%20%3D%20%5Cfrac%7B%2850%20%2A%202000%29%20-%20%2850%2A0.40%2A2000%29%7D%7B%5B50%2A2000%5D%20-%20%5B%2850%2A0.4%2A2000%29%20%2B%2040000%5D%7D)
![Degree of operating leverage = \frac{100000 - 40000}{[100000] - [(40000) + 40000]}](https://tex.z-dn.net/?f=Degree%20of%20operating%20leverage%20%3D%20%5Cfrac%7B100000%20-%2040000%7D%7B%5B100000%5D%20-%20%5B%2840000%29%20%2B%2040000%5D%7D)
Answer:
(a) 0.667 (b) The Lerner index helps in estimating of the market power of a firm. it measures the percentage markup that a firm is able to charge.
The conditions where this market power last in the long-run are; the pricing power, Factor mobility, Barrier to entry or exist.
Explanation:
Solution
Given that:
(A) The Lerner index is computed below:
Lerner index = (P-MC)/P
Thus,
($15-$5.00)/$15
=10/15
= 0.667
(B) The Lerner index assist in measuring of the market power of a firm. it measures the percentage markup that a firm is able to charge.
Index spans from a low value (0) to a higher value of (1)
When a firm has a higher value of index, it is able to charge over it;s marginal cost and thus has a greater monopoly power
Other conditions where market power last in the long run is as follows:
- The pricing power
- Factor mobility
- Barrier to entry or exist
The correct answer is B. Necessary but not sufficient condition goal
Explanation:
A necessary condition for a goal refers to a condition or factor that is mandatory to achieve a goal. For example, to obtain a bachelor's degree a necessary condition is to complete a bachelor's program. Besides this, a condition is sufficient if no other conditions are required, this applies to the previous condition as the main requirement for a bachelor's degree is to complete all the courses or program.
In this context, inspiring and motivating people in the goal of making an organization that can learn and adapt is a necessary condition because organizations require cooperation and group work and this is achieved if people of the organization feel inspired and motivated. However, this is not the only condition, and therefore it is not sufficient as other factors such as a budget, a clear plan, etc. are needed.
Answer: Option B
Explanation: In simple words, the market in which the price of the securities reflect all the information that is relevant to the the investor is called an efficient market. No investor can beat such markets as no security is undervalued or overvalued.
This accuracy in pricing could only be maintained when all the participants are fully aware of new information which is possible only if the information is quickly spread in the market.
Hence the correct option is B.
Answer:
It contributes to political and civil freedom, in theory, since everybody has the right to choose what to produce or consumer. It contributes to economic growth and transparency. It ensures competitive markets.
