Which of the Following Is a Disadvantage of Partnerships Over

question 8

Multiple Choice

Which of the following is a disadvantage of partnerships over sole proprietorships?

• A)Unlike sole proprietorships,partnerships do not face any regulatory controls that affect their activities.
• B)In partnerships,all owners have unlimited liability,whereas in sole proprietorships they have limited liability.
• C)In partnerships,profits have to be shared,whereas in sole proprietorships all profits belong exclusively to the owner.
• D)In sole proprietorships,the owners have access to more funds than in partnerships.
• E)Unlike a sole proprietorship,a partnership is terminated when a partner dies or withdraws.

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Definitions:

Marginal Cost Curve

A graphical representation showing how the cost of producing one more unit of a good varies as the quantity of the good produced changes.

Average Fixed Cost

The fixed cost per unit of output.

Firm

An organization or business entity that produces goods or provides services with the aim of earning profits for its owners or shareholders.

Variable Costs

Expenses that fluctuate in direct proportion to the volume of production or output.