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A Firm That Has Total Fixed Costs of $2,000 Sells

Question 16

Multiple Choice

A firm that has total fixed costs of $2,000 sells its output for $25 per unit and has an average variable cost of $20. If the firm's cost and revenue curves are linear and output is equal to 600 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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