AFP
CTP · Question #334
(Topic 4) Company ABC is a restaurant chain that has enjoyed a surge in customers' dining with not much of a profitability increase in the last couple of years. Following a bad restaurant review…
The correct answer is D. Low operating leverage. See the full explanation below for the reasoning.
Question
- (Topic 4)
Company ABC is a restaurant chain that has enjoyed a surge in customers’ dining with not much of a profitability increase in the last couple of years. Following a bad restaurant review, customer traffic deteriorated with not much change in profitability. Which of the following BEST describes the cost structure of the company?
Options
- ALow variable costs
- BEconomies of scale
- CLow financial leverage
- DLow operating leverage
How the community answered
(35 responses)- A11% (4)
- B3% (1)
- C3% (1)
- D83% (29)
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