Frank, the Owner of a Local Furniture Store That Has

question 28

Multiple Choice

Frank, the owner of a local furniture store that has been in business for 75 years, is retiring. He is selling his store to a new venture capitalist with no roots in the community. As they sit down over coffee at the local deli, what are some things that Frank should share with the new owner about the success of his business?

• A) Frank should share the organizational chart, as well as a list of local businesses not to partner with.
• B) Frank should share his list of interview questions for hiring new employees.
• C) Frank should share the culture of the company through stories, rites, and rituals.
• D) Frank should share his list of buyers and how he negotiated his prices.
• E) Frank should share which community events he has already agreed to take part in over the next three years.

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Definitions:

Perfectly Competitive Industry

An industry structure where many firms produce identical products, entry and exit are easy, and no single firm can influence the market price.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded, with a typical downward slope indicating that demand increases as price decreases.

Producer's Surplus

The difference between what producers are willing to accept for a good or service and what they actually receive.

Marginal Cost Curve

A graph showing the change in total production cost that comes from making or producing one additional unit.