Which of the following is a disadvantage of corporations? A. Corporations can become so large that they have too much influence over an industry. B. Corporations are not able to market their products widely. C. Corporations have higher production costs because of their large size. D. Corporations do not invest in research to develop new products.

Answer: A. Corporations can become so large that they have too much influence over an industry

Explanation: Due to the large volume of production, corporations purchase raw materials, semi-finished products in large quantities, which means that the purchase price is lower. This is usually more advantageous for large manufacturers because they have a well-developed purchasing system and lower production costs. Corporations also have no problem marketing and selling their goods widely, because such corporations are constantly expanding their market due to their size and influence. Also, corporations are constantly investing in new research and improvement of production and product quality. It is one of the prerequisites for staying large and competitive.

What is not an advantage of corporations is that they can get too big and have too much influence on the industry. When a corporation grows too large, and so does the level of conglomerates, it can have a negative impact on, for example, the prices of its products, because then it occurs something called a discount, which is common for large corporations. In addition, there are also double taxes, massive, cumbersome documentation, as well as management, because there is no single owner in the corporation.