Which of the Following Statements Is Correct

question 19

Multiple Choice

Which of the following statements is correct?

• A) A hostile takeover is a primary method of transferring ownership interest in a company.
• B) The company is a legal entity created by the state and is a direct extension of the legal status of its owners and managers, that is, the owners and managers are the company.
• C) Unlimited liability and limited life are two key advantages of the corporate form over other forms of business organisation.
• D) In part due to limited liability and ease of ownership transfer, companies have less trouble raising money in financial markets than other organisational forms.
• E) Although shareholders of the company are insulated by limited legal liability, the legal status of the company does not protect the firm's managers in the same way.

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Definitions:

Average Product

The output per unit of input, calculated by dividing total product by the total quantity of input used to produce that output.

Nonlabor Resources

Inputs or resources used in production that do not include human labor, such as raw materials, machinery, and land.

Marginal Product

The additional output generated by adding one more unit of a specific input, such as labor or capital, while holding other inputs constant.

Total Product

Total product refers to the total quantity of output produced by a firm within a given period as a result of inputs like labor and capital.