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If a Supply Curve Is Horizontal, Then Supply Is Said

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If a supply curve is horizontal, then supply is said to be perfectly elastic, and the price elasticity of supply approaches infinity.


Definitions:

Accounts Receivable

Funds that are owed to a company by customers for goods or services delivered or used but not yet paid for, typically within a short-term period.

Allowance for Doubtful Accounts

A contra-asset account that represents the estimated portion of accounts receivable that may not be collectible.

Bad Debts Expense

The amount of receivables that a company does not expect to collect and thus writes off as a loss in its accounting records.

Accounts Receivable Turnover

A financial ratio indicating how many times a company's accounts receivable are collected during a specific period.

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