A Major Disadvantage of a Sole Proprietorship Is the Fact

question 14

Multiple Choice

A major disadvantage of a sole proprietorship is the fact that _____.

• A) it is expensive to establish
• B) the owner has unlimited personal liability
• C) it is easy to finance growth
• D) the owner pays taxes on all the income

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Definitions:

Pure Monopoly

A market structure where a single company or entity exclusively produces and sells a product or service, with no close substitutes.

Four-Firm Concentration Ratio

A metric indicating the total market share controlled by the four largest firms within an industry, used to assess market competitiveness.

Herfindahl Index

A measure of the concentration of market power held by the largest firms within an industry.

Antitrust Laws

Regulations designed to promote competition and prevent monopolies by restricting unfair business practices and mergers that could lead to a concentration of market power.