What Is Permanent Working Capital

question 88

Multiple Choice

What is permanent working capital?

• A) the amount that a firm must keep invested in its short-term assets to support its continuing operations
• B) the difference between the actual level of investment in short-term assets and the amount that a firm must keep invested in its short-term assets to support its continuing operations
• C) the amount that a firm keeps invested in its short-term assets to support its continuing operations which are financed by short-term debt
• D) the amount that a firm keeps invested in its short-term assets to support its continuing operations which are financed by long-term debt

---

Definitions:

Price-Leadership Model

A market strategy where a leading firm sets prices that other firms in the industry then follow, influencing the pricing practices across the market.

Cournot Model

An economic model that describes an industry structure in which companies compete on the quantity of output they produce, assuming their rivals' output levels are fixed.

Oligopoly Market

A market structure characterized by a few firms dominating the industry, leading to limited competition.

Concentration Ratio

A measure used to indicate the level of competition within an industry by quantifying the market share held by the largest firms.