Question 24
Business OrganisationsA major difference between a state-owned enterprise and a private enterprise is that the former
- A.is not expected to cover its costs of production while the latter is
- B.is not always expected to maximize profits while the latter is
- C.has shareholders while the latter does not
- D.has a board of directors while the latter does not
Show the answer and explanation
Answer: B (is not always expected to maximize profits while the latter is)
Explanation
Public enterprises are set up mainly to provide services to the public, not to maximise profit; private firms aim at profit.