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Degree of Operating Leverage Problem
Production = 1000 unitsP = $5FC = $1450VC = 2.75
Calculate the DOL and the break even point. Is the company breaking even yet?
If the company installs new equipment, FC rise to $2000 and AVC drops to $2.25, what is the break-even point and at what production level should the company switch from the old machine to the new?
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Union B faces a demand curve in which a wage of $6 per hour leads to demand for 30,000 person hours, whereas a wage of $5 per hour leads to demand for 33,000 person hours. Which union faces more elastic demand curve.
Elucidate effect does the current supply and current demand have on this product.
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