Colin, Debby, and Erin Agree to Be Partners in Fajita

question 51

Multiple Choice

Colin, Debby, and Erin agree to be partners in Fajita Pizza, splitting the profits equally. Colin contributes 65 percent of the capital. When Fajita Pizza is dissolved, its liabilities are greater than its assets. The losses are paid by

• A) ​all of the partners in proportion to their capital contributions.
• B) ​all of the partners in proportion to their shares of the profits.
• C) ​Colin because he contributed most of the capital.
• D) ​Debby and Erin because they contributed the least of the capital.

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Definitions:

Equilibrium Level

The point at which market supply equals market demand, leading to a stable situation where there is neither excess demand nor excess supply.

Equilibrium Price

The price at which the quantity of a good or service supplied is equal to the quantity demanded, resulting in no net surplus or shortage in the market.

Natural Gas

A fossil fuel used as a source of energy for heating, cooking, and electricity generation, consisting primarily of methane.

Supply And Demand

The fundamental economic model that explains the interaction between the quantity of a good or service that producers wish to sell and the quantity that consumers wish to buy.