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Melbourne Meat Pies ( MMP ) is going to produce frozen meat pies at a variable cost of $ 3 per pie. MMP sells its
Melbourne Meat Pies MMP is going to produce frozen meat pies at a variable cost of $ per pie. MMP sells its pies at a price of $ per pie. The fixed costs associated with the production are $K The assembly line that makes these pies requires an initial id Side question: If a firms fixedcosts are zero, what is the d DOL for that firm?
e Okay, back to meat pies. As MMP increases its output level, does OCF increase, decrease, or stay the same?
f As MMP increases its output level, do Fixed Costs increase, decrease, or stay the same?
g As MMP increases its output level, do Fixed Costs increase, decrease, or stay same relative to OCF?
h As output level increases, degree of operating leverage just gets closer and closer to what number?nvestment of $K; this assembly line will be depreciated over years.
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