The Main Disadvantage to Organizing a Business as a Proprietorship

question 368

Multiple Choice

The main disadvantage to organizing a business as a proprietorship is

• A) its complex management structure.
• B) limited liability.
• C) unlimited liability.
• D) that economic profit cannot be maximized.

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Definitions:

Target Pricing

Target pricing is a pricing strategy where the selling price is determined by estimating a competitive price in the market and working backward to calculate costs, aiming for a certain profit margin.

Price Cutting

A strategy where a company reduces the prices of its goods or services, often to attract more customers or compete with rivals.

Product Class

A broad category of products that serve a similar function or are marketed in a similar manner but vary in features, quality, and price.

Product Line

A group of related products under a single brand offered by a company, catering to varied customer needs or preferences.