Which of the Following Is Not an Advantage of a Sole

question 106

Multiple Choice

Which of the following is not an advantage of a sole proprietorship?

• A) It is easy to form and dissolve.
• B) It has unlimited liability.
• C) Profits are taxed as personal income.
• D) There is no legal requirement to reveal vital facts about the business.
• E) The owner keeps all profits.

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Definitions:

Covert Collusion

A secret agreement between firms to fix prices, limit production, or divide markets, which is illegal and anti-competitive.

Cartel

A group of firms behaving like a monopoly.

Competitive Spectrum

The range of competition levels across different markets or industries, from perfect competition to complete monopoly.

Collusion

The practice of firms to negotiate price and/or market share decisions that limit competition in a market.