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To: Lorianne

It is called operating leverage.

Revenue grows at x%, and profit grows at (x+ ol)%


12 posted on 07/31/2017 9:17:23 AM PDT by Triple (Socialism denies people the right to the fruits of their labor, and is as abhorrent as slavery)
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To: Triple

If costs are fixed & there is extra capacity extra sales go mostly on the profit side and change the % profit drastically. Think of a school 10 students per class, 15 students per class minimal increased cost, still 1 teacher, same # hrs same class room, more desks. last 5 students almost pure profit.
Machines not idle, cost of supplies, the rest profit.

The author is really confused on basic economics.


38 posted on 07/31/2017 11:29:50 AM PDT by JayGalt (Let Trump Be Trump)
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