chapter f13 analysis of operating activities questions 13 1 generally in this situation one would expect that profits increase by a rate greater than the sales since large portion company s costs are fixed has high degree leverage means production and can fairly significantly with very little therefore each new dollar is retained as profit 2 about same perhaps marginally faster variable low there few economies scale to be realized from expanding or for most if double cost will was before 3 frankly no product differentiation strategy typically built around enhancing imbuing additional features value it expected customer pay more
