Step 1 of 4 a) Degree of operating leverage is an elasticity formula which measures the percentage change in profit resulting from a percentage change in quantity produced. DOL =- O( P - AVC) O(P - AVC)-TFC 8,000(P - AVC) 1.5 = 8,000( P - AVC) -10,000 8,000(P - AVC) 1.5 = 8,000((P - AVC)-2) How this -2 is derived? Could yoy please help 12,000 ((P - AVC) -2) = 8,000(P - AVC) clarify. 1.5 ((P - AVC)-2) = (P- AVC) 1.5P-1.5AVC-3 = P - AVC