What occurs when a firm's business is terminated Assets are sold, proceeds are used to pay creditors, and any leftovers are distributed to shareholders ?
Correct answer: D. Liquidation
- A. Solvency
- B. Crash
- C. Bankruptcy
- D. Liquidation
Explanation
Liquidation is the process of ending a firm by selling its assets, paying creditors, and distributing any remaining value to shareholders. Bankruptcy is a legal or financial condition that may lead to liquidation, but is not the described process itself.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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