Business Awareness Questions

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

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.

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

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

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.

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.