Which of the Following Should Be Accomplished by a New

question 53

Multiple Choice

Which of the following should be accomplished by a new owner who purchased an existing business?

• A)He or she should make all significant changes in one day so as to alleviate any lingering concerns by the employees.
• B)He or she should devise layoff plans taking enough time so that he or she obtains the goodwill of the employees.
• C)He or she should ensure the former owner comes to the business every day for at least 30 days following the sale.
• D)He or she should wait for at least 6 months before informing customers and suppliers of the sale of the business.

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Definitions:

Marginal Revenue

The incremental revenue procured by selling an extra unit of a product or service.

Marginal Cost

The cost of producing one additional unit of a product or service, crucial for pricing and production decisions.

Purely Competitive Firm

A business operating in a market where there are many buyers and sellers of a homogeneous product with no single entity able to influence the market price.

Normal Profits

The minimum level of profit needed for a company to remain competitive in the market, also seen as the opportunity cost of capital.