Question

According to Friedman's argument, _________. a. individual proprietors probably can't create a monopoly, so they must have social obligations. b. individual proprietors probably can't create a monopoly, but any use of their company's money for social obligations still counts as a tax on employees and customers. c. individual proprietors are foolish because they haven't incorporated. d. individual proprietors would make much more money if they sold stock.

Answer 1

Answer:

b. individual proprietors probably can't create a monopoly, but any use of their company's money for social obligations still counts as a tax on employees and customers.

Explanation:

Friedman is an economist that postulated the theory of social responsibility by businesses. While businesses had a primary duty to shareholders to maximise profits, it also has a responsibility to contribute to the society where it operates.

So when the company's money is used for social obligation bit is a form of tax on the company's employees and customers, giving back to the society.