Joe Jackson Operates a Sole Proprietorship,but He Is in Poor

question 143

Multiple Choice

Joe Jackson operates a sole proprietorship,but he is in poor health and may be unable to continue running the business.If Joe 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 Joe's heirs.
• D)Becomes the property of the most senior employee who wishes to continue operating the firm.

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Definitions:

Average Total Cost

The average cost per unit of output expressed as the total production cost divided by the number of units produced.

Average Total Cost

The total cost per unit of output, calculated by dividing the total cost by the quantity of output produced.

Efficient Scale

The level of production at which a firm operates with the lowest average total costs, achieving economies of scale without incurring diseconomies of scale.

Short-Run Cost Curves

Graphical representations that show the relationship between a firm's costs and output levels in the short term.