Torrie Is Thinking of Starting Up a Small Business Selling

question 34

Multiple Choice

Torrie is thinking of starting up a small business selling hand-painted wine glasses.She is considering setting up her business as a sole proprietorship.What is one disadvantage to Torrie of setting up her business as a sole proprietorship?

• A)As a sole proprietor,Torrie would be taxed twice.
• B)As a sole proprietor,Torrie would not have control of the business.
• C)As a sole proprietor,Torrie would face unlimited liability.
• D)As a sole proprietor,Torrie would be subject to significant rules and regulations.

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Definitions:

Total Revenue

The sum total of revenue a business earns from its sales activities and service provisions during a particular period.

Inelastic Demand

A situation where the demand for a product does not change significantly with a change in price.

Elastic Demand

Reflects how the quantity demanded of a good or service changes in response to a change in price; high elasticity indicates demand is highly sensitive to price changes.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing and able to buy.