Business Awareness Questions

In economics we study that, if the price of a good increases the demand in its quantity decreases or the demand for its complimentary good increases.

For example, if the rice of a good increased by 5%, the demand in its quantity decreases by 10% approximately.

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.

Making Optimal decisions at the margin requires "Weighing the costs and benefits of a decision before deciding if it should be pursued".

Debts owed by a business are referred to as Liabilities. Liabilities include all loans, outstanding expenses, mortgages, creditors, etc...

The Business Entity concept is also called as Separate Entity or Economic Entity concept. This concept states that the transactions and all the balances related or associated with a business must be recorded or accounted separately from other businesses or the individual personal transactions.

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.