Question detail
FreshFork serves price-sensitive customers while using retained profit; the case evidence includes break-even output of ?7,229, sales of 829 units, and a 32% change in costs or demand. Which option best applies Explain limited liability and identify which legal structures benefit from it?
Try the question, check the answer, then read the explanation to understand the curriculum point.
At a glance
MCQ
Type
practice
Style
Topic
Business ownership
Question
- A. Use limited liability to judge break-even output, suppliers impact, and the business objective in Benefits, drawbacks and suitability.
- B. Give only a definition of Business ownership without using the case evidence.
- C. Treat revenue and profit as identical and ignore the effect on suppliers.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use limited liability to judge break-even output, suppliers impact, and the business objective in Benefits, drawbacks and suitability.
Explanation
The answer is commercially strongest because Use limited liability to judge break-even output, suppliers impact, and the business objective in Benefits, drawbacks and suitability. The case evidence gives ?8,729, 829 units, and 32%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse revenue and profit, miss the suppliers, or ignore the business objective.
Common mistake
Benefits, drawbacks and suitability common mistake 1
Giving a vague answer instead of directly addressing: Explain limited liability and identify which legal structures benefit from it..
Answer by clearly explaining how to explain limited liability and identify which legal structures benefit from it..
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