Which of the Following Is a Disadvantage of a Limited

question 53

Multiple Choice

Which of the following is a disadvantage of a limited liability company?

• A) Because profits are taxed only at the shareholder level, there is no double taxation.
• B) The number of shareholders is unlimited.
• C) The number of members, tax issues, and implementation is flexible.
• D) Tax accounting can be complicated.
• E) limited liability.

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Definitions:

Efficiency Loss

Economic costs that arise when market equilibrium is not achieved, or when resources are not allocated optimally, leading to waste or suboptimal outcomes.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved or is not achievable.

Marginal Cost

The extra expense associated with manufacturing an additional unit of a product or service.

Maximum Willingness

Describes the highest amount a consumer is willing to pay for a good or service, reflecting the maximum value they derive from it.