Would you expect the following to be high or low in a labour-intensive firm: (1) operating leverage, (2) safety margin and (3) profit potential?

A) Low, high, low
B) Low, low, high
C) High, low, high
D) High, low, low

Operating Leverage

Refers to the extent to which a company uses fixed costs in its production process, impacting profitability with changes in sales volume.

Safety Margin

The difference between the actual level of performance or capacity and the minimum required level, serving as a buffer or contingency.

Labour-Intensive Firm

A company that requires a high level of labor input compared to capital investment in its operations.