If a Partner Acts as an Agent for the Partnership

question 3

Multiple Choice

If a partner acts as an agent for the partnership, the resulting contract:

• A) cannot be refuted by the other partners.
• B) would not be enforceable by law.
• C) would not be binding on the other partners.
• D) can be canceled by the other partners.

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Definitions:

Excess Capacity

A situation where a company can produce more goods than the market demands, often leading to inefficiencies.

Monopolistic Competition

A market structure featuring many firms selling products that are similar but not identical, allowing for competition based on quality, price, and marketing.

Chronic Excess Capacity

A persistent situation in which industries or firms have more production capacity available than is being used, often leading to economic inefficiencies and reduced profit margins.

Minimum-Cost Output

The quantity of output at which the average total cost is lowest—the bottom of the U-shaped average total cost curve.