Business Awareness Questions

The demand curve facing a perfectly competitive firm is a horizontal straight line equal to the equilibrium price of the entire market because a perfectly competitive firm can sell all units brought to market at the same price.

Equivalent units of production are equal to number of whole units that could have been completed if all work of the period had been used to produce whole units.

For a good that is a luxury demand tends to be elastic.

Net working capital is defined as the aggregate of the current liabilities and current assets i.e, it measures the company's ability to pay off its current liabilities with in the current assets.

An increase in the price level will cause a movement up the aggregate demand curve.

Demand curve is the relationship between price and quantity of product. In perfect competition, the demand curve for the product by a firm is perfectly elastic at maket price.