Which of the Following Statements Is True of the Liability

question 82

Multiple Choice

Which of the following statements is true of the liability of an incoming partner?

• A) An incoming partner is liable for the previous debts of the partnership.
• B) An incoming partner is equally liable for all existing debts of the partnership.
• C) An incoming partner is liable for the debts of the partnership only to the extent of his or her capital contribution.
• D) An incoming partner is not liable for the future debts of the partnership.

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Definitions:

Welfare Loss

The decrease in economic efficiency that occurs when the optimal allocation of resources is not achieved, leading to a loss of total welfare.

Unregulated Monopoly

A market condition where a single company or entity exclusively controls a particular industry or service without any governmental restrictions or oversight.

Pure Competition

A market structure characterized by a large number of small firms producing an identical product in an industry (market area) that permits complete freedom of entry and exit. Also called price-taker markets.

Efficient Allocation

The process of distributing resources in a way that maximizes the net benefit received from their use.