How Does the Owner of a Sole Proprietorship Relate to the Business

question 117

Multiple Choice

How does the owner of a sole proprietorship relate to the business?

• A)The owner and the business are separate legal entities.
• B)The owner and the business are not separate legal entities.
• C)The assets of the owner are considered separate from the assets of the business.
• D)None of these describe the legal relationship of the owner to the business.

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Definitions:

AVC

Average Variable Cost, which is the total variable costs of production divided by the quantity of output produced.

Marginal Cost

The increase in total cost that arises from producing an additional unit of a good or service.

Average Variable Cost

The total variable costs (costs that change with the level of output) divided by the quantity of output produced.

Average Fixed Cost

The total fixed costs of production divided by the quantity of output produced, illustrating how fixed costs per unit change with output levels.