Which of the Following Is a Primary Disadvantage of Choosing

question 24

Multiple Choice

Which of the following is a primary disadvantage of choosing to form corporations as opposed to other forms of business?

• A) Pass-through taxation.
• B) Unlimited liability of officers and directors.
• C) Costs and formalities of setup.
• D) The difficulty of raising capital.

---

Definitions:

Outputs

The products or services generated by a business or an economic system.

Inputs

The resources, such as capital, labor, and materials, used in the production process to create goods or services.

Marginal Product

The increase in output that occurs when one more unit of a certain input is added, with all other inputs remaining the same.

Profit Maximization

The process or strategy used by businesses to determine the price and output level that leads to the highest profit.