1. Option C is correct.
Corporations had the important advantage of reducing the financial risk for individual investors.
2. Option C is correct.
The ICC was formed to make new transportation laws.
Further Explanation:
1.
The advantages of corporations are:
• Limited liability.
• Capital can be easily raised
• Ownership can be easily transferred through the transfer of shares.
• Perpetual Succession
Justification for the correct and incorrect answer:
A.
Being run by an individual or a family: This option is incorrect.
The corporations are managed by the board of directors who can be an individual or a group of individuals. It can also be run by the person who is not a member of the family.
B.
Developing into monopolies: This option is incorrect.
The corporation does not lead to the formation of the monopoly. There are many corporations in the industry which ensures fair competition in the market.
C.
Reducing the financial risk for individual investors: This option is correct. The corporations have limited liability; it means that the individuals are only liable for the amount that remains unpaid on the shares held by them or amount that they agree to contribute at the time of winding up. This reduces the risk for the investors.
D.
Keeping prices high: This option is incorrect.
The corporations do not keep the prices high because there are many competitors of the company in the market. If they price their product very high, then the consumer will not buy its product as; it as available at low prices.
2.
The Interstate Commerce Commission (ICC) came into existence by the Interstate Commerce Act. It was formed as a regulatory agency to regulate railroads in order to eliminate discrimination in rate, ensure fair prices, and also regulate different aspects of carriers like telephone companies and interstate bus network.
Justification for the correct and incorrect answer:
A.
Oversee railroad operations: This option is correct.
The ICC was formed to regulate railroads in order to eliminate discrimination in rate, ensure fair prices, and also regulate different aspects of carriers like telephone companies and interstate bus network.
B.
Control interstate commerce: This option is incorrect.
It does not control interstate commerce but regulates the transportation services between various states.
C.
Make new transportation laws: This option is incorrect.
The ICC regulates transportation, does not make law for transportation. Its basic purpose is to regulate the railroads.
D.
Regulate communications across state lines: This option is incorrect.
It regulates telephone companies in order to ensure fair prices are charged for the communication services but does not directly regulate communication across the state network
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Answer details:
Grade: High School
Subject: Business Studies
Chapter: Forms of business organization
Keywords: Corporations, being run by an individual or a family, developing into monopolies, reducing the financial risk for individual investors, keeping prices high, The ICC, oversee railroad operations, control interstate commerce, make new transportation laws, regulate communications across state lines.
