A Partner Will Not Bind the Partnership to an Outside

question 94

Multiple Choice

A partner will not bind the partnership to an outside purchase contract when the

• A) the item purchased is considered immaterial in amount
• B) item purchased is not within the normal scope of the business
• C) partner was not authorized by the other partners to make the purchase
• D) partner who made the purchase withdraws from the partnership

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Definitions:

Price-Regulated

A market condition where the government sets the maximum or minimum prices for certain goods or services to protect consumer interests or ensure affordability.

Marginal Cost

The extra expense associated with the creation of an additional unit of a product or service.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable, leading to a mismatch in supply and demand.

Demand Curve

A chart that displays the connection between a product's price and the amount of the product buyers are prepared and able to buy at different price levels.