Which One of the Following Is a Correct Statement Concerning

question 142

Multiple Choice

Which one of the following is a correct statement concerning a sole proprietorship?

• A) A sole proprietorship is relatively difficult to form.
• B) The profits earned by a sole proprietorship are subject to double taxation.
• C) A sole proprietorship is more highly regulated than a corporation.
• D) The losses incurred by a sole proprietor are limited to the amount invested in the firm.
• E) It may be difficult to transfer the ownership of a sole proprietorship.

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Definitions:

Per-Unit Tax

A tax imposed on a product based on a fixed amount for each unit sold, affecting the supply curve by increasing the cost of production.

Units Sold

The number of individual items or products that have been sold over a specific period.

Elasticity

A measure of how much the quantity demanded or supplied of a good or service changes in response to price or other factors.

Tax Burden

Refers to the economic impact of taxes on an individual, corporation, or market, often measured as a percentage of income or GDP.