You Have Been Running a Successful Art and Framing Shop

question 142

Multiple Choice

You have been running a successful art and framing shop for three years. You have decided to allow others to use your business name, materials, and methods in operating their own business for a fee. You are going to enter a

• A) joint venture.
• B) small-business development center.
• C) franchise agreement.
• D) venture capitalist agreement.
• E) business contraction.

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Definitions:

Price Taker

A buyer or seller that is unable to influence the market price of a product or service.

Marginal Revenue Curve

A graphical representation showing how the revenue from selling one more unit of a good or service changes as production volume changes.

Price-searcher Firm

A company that has the ability to set the price for its products because it does not face perfect competition.

Marginal Revenue

The increase in revenue that results from the sale of one additional unit of product.