Question

As the business flourishes, a sole proprietorship might not get a chance to decrease costs as it lacks the economies of large scale business.

• A. True
• B. False

Answer 1

Answer: (A)

As business flourishes, a sole proprietorship might not get a chance to decrease costs as it lacks the economies of large scale business- this is a true statement. Sole proprietors operate mostly on a small-scale basis and their number is large. 'Sole' means singe and 'proprietorship' means ownership.

The business organization in which the single owner owns, manages and controls all the activities of the business is known as sole proprietorship form of business organization.