Discuss the advantages and disadvantages of proprietorships
What will be an ideal response?
Proprietorships are easy to form and to dissolve. Furthermore, all the decisions are made by the proprietor, so decisions can be made quickly. The profits are taxed only once, which is not the case for corporations. However, there are also disadvantages. The biggest disadvantage is unlimited liability: the owner is personally responsible for all the debts of the firm, and could lose assets that are not part of the firm. This often makes it difficult to raise financial capital. Finally, the firm ends with the death of the owner, creating uncertainty for employees and creditors.
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If a company pays a dividend of $2 to be received one year from now, dividends are expected to grow at a rate of 3 percent per year for the indefinite future, and the interest rate is 4 percent, the price of the company's stock should be ________ per
share. A) $3.40 B) $28.57 C) $200.00 D) $340.00
Competition is
What will be an ideal response?
The long run outcome of the monopolistically competitive firm:
A. does not maximize profits. B. occurs where price equals marginal cost. C. creates welfare loss. D. maximizes total surplus.
For each of the following pairs of products, state which are complements, which are substitutes, and which are unrelated
a. Swim fins and scuba tanks b. Coca Cola and Volkswagens c. Printers and ink cartridges d. Ice and ice chests e. Heineken and Corona