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What Is a Sole Proprietorship? Identify and Explain Two Advantages

question 6

Essay

What is a sole proprietorship? Identify and explain two advantages and two disadvantages of sole proprietorships.


Definitions:

Free-rider Problem

A situation where individuals consume a good without paying for it, benefiting from the good or service without contributing to its cost.

Public Good

A good that is non-excludable and non-rivalrous, meaning that its use by one person does not reduce its availability to others and no one can be effectively excluded from using it.

Optimal Level

The most favorable balance or degree of any variable or condition for achieving maximum efficiency or effectiveness.

Public Good

A product or service that is available for all people to consume, without being depleted, regardless of who pays for it.

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