Rex Forms Shell Company to Assume Debts That He Does

question 45

Multiple Choice

Rex forms Shell Company to assume debts that he does not wish to pay. The firm is not intended to make a profit, and Rex does not provide it with sufficient capital. This most likely warrants

• A)tricking Rex into disclosing Shell's true purpose to Rex's creditors.
• B)recognizing Shell as a de facto corporation.
• C)piercing Shell's corporate veil.
• D)requiring Rex to commingle his personal funds and Shell's funds.

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Definitions:

Profits Maximization

The process or strategy aimed at achieving the highest possible profit by a firm within a given period.

Imperfect Competition

All market structures except pure competition; includes monopoly, monopolistic competition, and oligopoly.

Labor Demand Elasticity

The sensitivity of employers' demand for labor to changes in the price or cost of labor, reflecting how much the quantity of labor demanded responds to changes in wages.

Total Costs

The cumulative costs associated with the complete process of producing and selling a product or service.