The owner of a national construction company has been watching current economic changes. They have gathered historical data from their company’s business experiences through up and down markets and have decided on a plan to follow as demand changes over the next year, three years and five year plan, with alternative options based on past data. Why is the owner making these type of decisions for the long-run? A. The owner is using rational expectation reasoning to change important aspects of the company to be ready for future demands of a long-term economic shift.
B. The owner is using adaptive expectation reasoning to change important aspects of the company to be ready for future demands as the long-term economy shifts.
C. The owner is using aggregate expectation reasoning to to change important aspects of the company to be ready for short-term future demands.

Magic realm, inc., has developed a new fantasy board game. the company sold 15,000 games last year at a selling price of $20 per game. fixed expenses associated with the game total $182,000 per year, and variable expenses are $6 per game. production of the game is entrusted to a printing contractor. variable expenses consist mostly of payments to this contractor.required: 1-a. prepare a contribution format income statement for the game last year.1-b. compute the degree of operating leverage.2. management is confident that the company can sell 58,880 games next year (an increase of 12,880 games, or 28%, over last year). given this assumption: a. what is the expected percentage increase in net operating income for next year? b. what is the expected amount of net operating income for next year? (do not prepare an income statement; use the degree of operating leverage to compute your answer.)