Which of the Following Is ALWAYS TRUE About the Purchases

question 60

Multiple Choice

Which of the following is ALWAYS TRUE about the purchases of existing businesses?

• A) Once under new ownership, existing businesses outperform initial revenue projections.
• B) Once under new ownership, any underlying problems are the responsibility of the new owner.
• C) Once under new ownership, consumer curiosity about the new ownership will cause a spike in sales.
• D) Once under new ownership, remaining staff are suspicious or fearful of the new owner.
• E) Once under new ownership, existing customers will be resentful toward the new owner.

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Definitions:

Monopolistically Competitive

A type of market structure characterized by many sellers offering differentiated products, leading to competition based on product features, price, and quality.

Profit

The financial gain obtained when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Price

The sum of money anticipated, demanded, or provided as compensation for something.

Long-run Equilibrium

A state in which economic forces such as supply and demand are balanced, and all adjustments to economic conditions have been made, often characterized by firms earning normal profit in perfectly competitive markets.