There Are Many Reasons Why a Firm Can Earn Above-Normal

question 69

Multiple Choice

There are many reasons why a firm can earn above-normal profits. These reasons include all of the following EXCEPT ____.

• A) access to superior labor or managerial talents
• B) superior access to financial resources at lower costs
• C) patent control of superior product designs
• D) ability of new firms to acquire necessary factors of production

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Definitions:

Corporations

Businesses that are legally recognized as separate entities from their owners, having their rights and liabilities.

Single Taxation

A tax system where income is taxed only once, typically referring to how corporate profits are taxed at either the corporate or shareholder level but not both.

Mutual Agency

A principle in partnerships where each partner has the power to bind the entire partnership to a contract or agreement.

Limited Liability

A principle where a company's shareholders are legally responsible for its debts only to the extent of the amount of capital they invested.