Characteristics of a Corporation Include

question 89

Multiple Choice

Characteristics of a corporation include:

• A) stockholders having limited liability.
• B) direct management by the stockholders.
• C) mutual agency.
• D) Both A and C are correct.

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Definitions:

Economies Of Scale

The advantages in cost that enterprises gain by scaling up their operations, usually seen as a decrease in the per-unit cost of output as production scales up.

Minimum Average Cost

The lowest point on the average cost curve, representing the most efficient scale of production for minimizing costs.

Competitive Firm

A firm operating in a market where it has no power to influence market prices and typically faces many competitors with similar products.

Normal Profits

The minimum level of profit needed for a company to remain competitive in the market; it occurs when economic profit is zero after accounting for all costs, including opportunity costs.