Which of the Following Statements Regarding Companies Is Incorrect

question 54

Multiple Choice

Which of the following statements regarding companies is incorrect?

• A) A company is a discrete legal entity.
• B) Since shares represent ownership in a company, ownership cannot be readily transferred to new owners.
• C) A company has a potentially unlimited life.
• D) The shareholders' liability is limited.

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Definitions:

Economic Profit

The difference between total revenues and total economic costs, including both explicit and implicit costs.

Industry

A sector of the economy composed of businesses and organizations involved in the production of goods or provision of services.

Demand Curves

A graphical representation showing the quantity of a good or service demanded at different price levels.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for significant differentiation and market power.