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(1.10) Two firms, A and B, both produce widgets. The price of widgets is $1each....

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Finance

(1.10) Two firms, A and B, both produce widgets. The price of widgets is $1each. Firm A has total fixed costs of $500,000 and variable costs of 50 cents perwidget. Firm B has total fixed costs of $240,000 and variable costs of 75 cent perwidget. The corporate tax rate is 40%. If the economy is strong, each firm will sell1,200,000 widgets. If the economy enters a recession, each firm will sell 1,100,000widgets.Calculate firm As degree of operating leverage.A.11.0B.2.86C.9.09D.1.24E.8.05

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