An advantage of a proprietorship is that a. it is difficult and expensive to set

Question

An advantage of a proprietorship is that a. it is difficult and expensive to set up b. the owner has complete control over the business c. the business can issue stocks and bonds d. the owner has unlimited liability 1. 2. Equity financing alternatives include a. issuing bonds b. issuing stocks c. borrowing from a bank d. all of the above 3. Economists normally assume that the goal of a firm is to (i)make profit as large as possible even if it means reducing output (ii) (iii) make profit as large as possible even if it means incurring a higher total cost. make revenue as large as possible a. (i) and (ii) b. (i) and (iii) c. (ii) and (iii) d. None of the above are correct.

Explanation / Answer

1. Thr right answer is option b. the owner has complete control over the business.

Sole proprietorship proves independence to an owner because of which he/she can take an independent business decision. This is the main advantage of a sole proprietorship business.

Option a is not valid as it is relatively easy to set up a sole proprietorship. Also, it cannot issue stocks or bonds. SO, option b is also invalid. Lastly, option d is a disadvantage and not an advantage.

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