Which of the Following Is a Characteristic of a Corporation

question 316

Multiple Choice

Which of the following is a characteristic of a corporation but not of a small family-owned business?

• A) The firm buys inputs in markets for the factors of production.
• B) The firm sells output in markets for goods and services.
• C) The firm is guided in its decisions by the objective of profit maximization.
• D) The firm faces a principal-agent problem created by the separation of ownership and control.

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Definitions:

Raise Capital

The process by which firms obtain funding to finance their operations, growth, or investments, often through issuing debt or selling equity.

Economic Flow

The movement of resources, goods, services, and money among households, businesses, and the government in an economy.

Large-scale Privatization

The process of transferring ownership of large government enterprises to private entities.

Karl Marx

A 19th-century philosopher and economist known for his theories on capitalism and communism.