Which of the Following Is a Disadvantage of Partnership Firms

question 167

Multiple Choice

Which of the following is a disadvantage of partnership firms?

• A) They cannot be dissolved without the permission of the SEC.
• B) They are taxed at multiple levels: corporate level and individual level.
• C) They have more difficulty in raising capital as compared to a sole proprietorship.
• D) They have mutual agency which creates personal obligations for each partner.

---

Definitions:

Marginal Cost

The expenditure involved in creating one more unit of a product or service.

Average Variable Cost

The cost per unit of producing additional units, excluding fixed costs, and is calculated by dividing total variable costs by the quantity of output.

Total Costs

The complete sum of all expenses a business incurs to produce its goods or services, including both fixed and variable costs.

Output

The cumulative quantity of products or services generated by a corporation, sector, or nation.