Which One of the Following Statements Concerning a Sole Proprietorship

question 4

Multiple Choice

Which one of the following statements concerning a sole proprietorship is correct?

• A)The life of a sole proprietorship is potentially unlimited.
• B)A sole proprietor can generally raise large sums of capital quite easily.
• C)Transferring ownership of a sole proprietorship is easier than transferring ownership of a corporation.
• D)A sole proprietorship is taxed the same as a corporation.
• E)It is easy to create a sole proprietorship.

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Definitions:

Purely Competitive Industries

Markets characterized by many buyers and sellers, homogeneous products, and free entry and exit, leading to price-taking behavior.

Cut-Throat Competition

Intense competition where competitors use aggressive tactics to undercut each other’s prices and gain market share.

Consumer Demand

The desire by consumers to purchase goods and services, quantified by the amount of a product people are willing to buy at certain price levels.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to a stable market condition.