Future Business Leader Achievments (FBLA) Economics Practice Exam

The largest number of business firms in the United States fall into which category of business organization?

1. Proprietorships

2. Partnerships

3. Corporations

4. Cooperatives

The correct answer is: Proprietorships

The largest number of business firms in the United States are indeed proprietorships, commonly known as sole proprietorships. This form of business organization is favored by many entrepreneurs due to its simplicity and ease of establishment. A sole proprietorship is owned and operated by a single individual, which means that it requires minimal legal formalities and is less expensive to start compared to other business structures like partnerships and corporations. Sole proprietorships also allow for complete control over business decisions and profits, making them an attractive option for many small business owners. This category encompasses a wide range of businesses, from local shops and service providers to freelancers and consultants. While they may not generate the same level of revenue as larger corporations, their sheer number makes them the most common type of business organization in the U.S. In contrast, partnerships, corporations, and cooperatives, although they may have different advantages such as shared liability and greater access to capital, are statistically fewer in number compared to sole proprietorships. Therefore, the prevalence of sole proprietorships in the business landscape is a key reason why this choice is considered the correct answer.