Firms with relatively low fixed operating costs and high variable operating costs can best be described as:

Question

Quizplus · Accepted Answer

Firms with low fixed operating costs and high variable operating costs have a low degree of operating leverage because their profits are less sensitive to changes in sales volume. Operating leverage measures how a firm's operating income changes with a change in sales, and lower fixed costs mean less sensitivity.

Firms with Relatively Low Fixed Operating Costs and High Variable