The Tax Treatment of Corporate Profit Means That Corporations

question 140

Multiple Choice

The tax treatment of corporate profit means that corporations

• A) cannot profitably issue common stock.
• B) choose investment opportunities more efficiently than do other types of firms.
• C) turn down more low-paying investment opportunities than do other types of firms.
• D) can generally avoid paying federal taxes but not state taxes.

---

Definitions:

Output

Output refers to the total amount of goods or services produced by a company, industry, or economy within a certain period, often used as a measure of productivity or economic activity.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, that sells goods or services in exchange for revenue.

Reduces

Makes smaller in amount, degree, or size; diminishes or lessens.

Perfectly Competitive

A market structure where many firms sell identical products, no single firm can influence the market price, and there are no barriers to entry or exit.