According to the Text, a Tension Exists Between Democracy and Capitalism

question 36

Multiple Choice

According to the text, a tension exists between democracy and capitalism primarily because

• A) politicians don't understand the needs of business.
• B) there is too much corruption in government.
• C) business executives think they are above the law and can escape punishment no matter what they do.
• D) capitalism is based on profits for the few, but democracy is based on democratic rights for the many.
• E) the values and ideals of business executives have nothing in common with those of politicians.

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Definitions:

Positive Profit

Refers to the financial gain that occurs when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the business.

Price-Searcher Firm

A company that operates in a market where it has some degree of control over the price of its products, due to the uniqueness of its offerings or market conditions.

Maximizing Profit

It refers to the process whereby businesses aim to increase their earnings to the highest possible level by optimizing their operations and resource utilization.

Competitive Price-Searcher

A market participant who sets prices based on the prices of competitors, often in markets with differentiated products.