Theory question 106
Business OrganisationsSection B: answer three questions only from this section.
Give five reasons why Government participates in business enterprise.
Show the model answer
Model answer
To provide essential services (water, electricity) that private firms may not provide adequately
To prevent private monopolies exploiting consumers
To control strategic industries (iron and steel, arms, oil) for national security
Some projects need capital too large for private investors (e.g. railways, refineries)
Some ventures yield too little profit to attract private investors but are socially necessary
To generate revenue for government
To create employment
To reduce foreign domination of the economy
To promote balanced development of all regions
Explanation
Five reasons, each briefly explained.