Which One of the Following Statements Is Correct

question 125

Multiple Choice

Which one of the following statements is correct?

• A) Both partnerships and corporations incur double taxation.
• B) Both sole proprietorships and partnerships are taxed in a similar fashion.
• C) Partnerships are the most complicated type of business to form.
• D) Both partnerships and corporations have bylaws.
• E) All types of business formations have limited lives.

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Definitions:

Total Fixed Costs

The sum of all costs that remain constant regardless of the level of production or sales, such as rent, salaries, or loan payments.

Profit-Maximizing Output

The level of production at which a firm achieves the maximum possible profit, where marginal cost equals marginal revenue.

Marginal Revenue

The additional revenue generated from selling one more unit of a good or service.

Marginal Costs

The rise in overall expenses resulting from the production of an additional unit.