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Degree of Operating Leverage
A measure of the firm's operating leverage, which is calculated as the contribution margin distributed by income before taxes. A rigid with a high degree of operating leverage will have a huge proportion of fixed costs in its total costs. This kind of rigid will experience a largest percentage increase in income from a given percentage increase in unit sales.
List a few types of non-price rationing systems. (a) Queuing. (b) Favored customers. (c) Rationing coupons.
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