Final answer:
The key difference between pyramid schemes and multilevel marketing lies in the legality and focus of the business model; MLMs sell products and pyramid schemes focus on recruitment.
Step-by-step explanation:
The primary difference between pyramid schemes and multilevel marketing (MLM) is c. the legal status of the sales structures. Pyramid schemes are generally illegal, as they rely on the continuous recruitment of new members to generate revenue rather than the sale of legitimate products or services. On the other hand, multilevel marketing is a legal business model, though often controversial, that involves selling actual products or services and generating revenue from both personal sales and the sales of team members recruited into the business.
MLMs are often compared to pyramid schemes because of their hierarchical setup where members earn commissions not only on their own sales but also on the sales of the individuals they recruit. However, the key difference is that legitimate MLMs focus on sales to consumers without requiring them to join the MLM, while pyramid schemes may offer no real product and require recruits to pay for the opportunity to sell the scheme itself, making money primarily through recruitment.