Mehdi Operates a Sole Proprietorship,but He Is in Poor Health

question 186

Multiple Choice

Mehdi operates a sole proprietorship,but he is in poor health and may be unable to continue running the business.If Mehdi becomes incapacitated,his business:

• A)automatically continues under new management as a sole proprietorship.
• B)automatically converts into a public corporation with stock sold to interested investors.
• C)ceases to exist unless sold or taken over by Mehdi's heirs.
• D)becomes the property of the most senior employee who wishes to continue operating the firm.

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Definitions:

Law of Demand

The principle that, ceteris paribus, there is an inverse relationship between the price of a good and the quantity demanded.

Quantity Demanded

The amount of a product or service consumers are willing to buy at a given price.

Demand Curve

A graphical representation showing how the quantity of a good or service demanded by consumers changes at different price levels.

Supply Curve

A graphical representation used in economics to show the relationship between the price of a good and the quantity of the good that suppliers are willing and able to supply at various prices.