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.
You might also like to view...
In the long run, the economic profits of a monopolistically competitive firm
A) will tend to be larger than in the short run. B) equal zero. C) will be the average short-run profits earned in the last five years. D) will be the same as in the short run.
In a typical cartel agreement, the cartel maximizes profit when it: a. behaves as a duopolist
b. is flexible in enforcing production targets. c. behaves as a monopolist. d. behaves as a perfectly competitive firm.
A tariff is a tax on ________________.
Fill in the blank(s) with the appropriate word(s).
The change reflected in the above figure might be a result of
A) a decrease in the real wage rate. B) an increase in the real wage rate. C) an increase in the money wage rate. D) a rise in the price level. E) a decrease in the money wage rate.