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Introduction to Economics - Class XI
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Operating Leverage is the response of changes in ____________.
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A
EBIT to the changes in sales
💡 Explanation:
Operating Leverage is also known as “Degree of Operating Leverage or "DOL”. The fact is that the greater use of fixed costs, greater will be the impact of a change in sales on the operating income of a company. Degree of Operating Leverage Formula = % change in EBIT / % change in Sales.