One of the Reasons Why C Corporations Have an Edge

question 22

Multiple Choice

One of the reasons why C corporations have an edge over sole proprietorships is:

• A) the ease of its formation.
• B) because single individuals can retain the total profits of the company.
• C) because members have unlimited liability toward the company.
• D) the permanence of the business.

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Definitions:

Nonexcludable

Referring to a good, describes the case in which the supplier cannot prevent those who do not pay from consuming the good.

Nonrival

A characteristic of a good or service that allows its consumption by one person without reducing its availability to others.

Common Resources

Natural or man-made resources that are not owned by anyone, tend to be overused or depleted, and are difficult to exclude people from using.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they can be used simultaneously by more than one person without diminishing availability to others.