Asked by Markayla Eakins on Jul 21, 2024
Verified
A retailer X that is operating at a loss gets bought out by a larger chain of department stores,which shuts down the brand,using its assets for their own brand,
A) Wealth is destroyed since the company shut down
B) Wealth is created since the resources were of lesser value under the X brand and are now worth more
C) Wealth is neither created nor destroyed since the total amount of resources stay the same
D) None of the above
Operating Loss
A situation where a business's operating expenses exceed its revenues, indicating that it is not making a profit from its core operations.
Department Stores
Large retail establishments that offer a wide variety of goods and services across multiple departments, such as clothing, household goods, and appliances, under one roof.
- Understand how wealth is created or destroyed through various economic actions and policies.
- Discern the principles behind the allocation of resources in creating or destroying wealth.
Verified Answer
RB
Ragien BrightJul 25, 2024
Final Answer :
B
Explanation :
When the larger chain of department stores shuts down the retailer X and uses its assets for their own brand, they are increasing their own value and creating wealth for themselves. The resources that were under the X brand may have been undervalued or not utilized properly, but under the larger chain, they are worth more and being utilized effectively, creating wealth.
Learning Objectives
- Understand how wealth is created or destroyed through various economic actions and policies.
- Discern the principles behind the allocation of resources in creating or destroying wealth.