One Disadvantage of a Sole Proprietorship as a Form of Business

question 96

Multiple Choice

One disadvantage of a sole proprietorship as a form of business organization is that

• A)sole proprietorships cannot lower the transaction costs associated with contracting with resource owners
• B)sole proprietorships are less efficient than corporations, because they are less specialized in production
• C)owners of sole proprietorships can lose all their personal assets if the business is sued or fails
• D)owners of sole proprietorships generally find it difficult to negotiate separation agreements with the other partners in the firm
• E)owners of sole proprietorships generally have very little control over how they operate their businesses

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Definitions:

Market Basket

A selected set of goods and services used to track an economy's inflation or cost of living over time.

CPI

The Consumer Price Index scrutinizes the average price changes of a broad spectrum of consumer items and services, like food, healthcare, and transport, by means of a weighted average calculation.

CPI

By utilizing a weighted average mechanism, the Consumer Price Index monitors the price trajectory of essential consumer goods and services, which includes food, transportation, and medical services.

Market Basket

A market basket refers to a selected set of goods or services that are consistently used and monitored over a period of time for the purpose of tracking inflation in an economy via a cost comparison.