If the economy is growing,firms with high operating leverage will experience __________.

Question

Quizplus · Accepted Answer

Firms with high operating leverage have a high proportion of fixed costs in their cost structure. As the economy grows, their fixed costs remain the same while their revenue increases, resulting in a larger increase in profits compared to firms with low operating leverage, who may have a higher proportion of variable costs.

If the Economy Is Growing,firms with High Operating Leverage Will