AFP
CTP · Question #295
(Topic 3) A company with high operating leverage reduces its average cost per unit by 20% as its sales volume increases by 40% annually. This an example oF.
The correct answer is C. economies of scale. See the full explanation below for the reasoning.
Question
- (Topic 3)
A company with high operating leverage reduces its average cost per unit by 20% as its sales volume increases by 40% annually. This an example oF.
Options
- Alow fixed costs.
- Blow variable costs.
- Ceconomies of scale.
- Dequal distribution of fixed and variable costs per item.
How the community answered
(29 responses)- A17% (5)
- B10% (3)
- C69% (20)
- D3% (1)
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