Final answer:
The impact on net operating income from a change in total sales is related to the concept of contribution margin. Changes in sales influence net operating income and consumer behavior through the income and substitution effects, which can affect other product sales as well.
Step-by-step explanation:
The impact on net operating income of any given dollar change in total sales can be analyzed through the concept of contribution margin. This is because the contribution margin is defined as the amount by which a product's sales exceed its variable costs. Therefore, it is the amount available to cover fixed costs and contribute to net operating income. Considering income effect in economics, which explains how changes in the price level affect consumer's buying power, it can be inferred that any changes in sales not only affect net operating income but also alter the consumer's ability to purchase other goods due to the interconnectedness of budget allocations.
For example, if the price of baseball bats increases, a consumer like Sergei might react by dramatically reducing his bat purchases and instead buy more cameras, affecting the overall sales and subsequently the net operating income of the companies selling these goods. This stems from an interplay between the substitution effect and the income effect, both of which affect consumers' purchasing decisions.