Final answer:
A reduction in operating expenses that has the same impact on a company's P&L statement as a 30% increase in sales requires understanding the relationship between price and quantity as well as considering profit margins and cost structures.
Step-by-step explanation:
The student's question seeks to understand the relationship between a reduction in operating expenses and an increase in sales in terms of their equivalent impact on a company's profit and loss (P&L) statement. To answer this, we need to recognize that total revenue remains unchanged when a given percentage rise in price (P) is matched by an equal percentage fall in quantity (Q).
It should also be noted that the effect on the P&L statement would depend on whether the elasticity of the product is unit elastic, where a given percentage change in price leads to an equal percentage change in quantity demanded.