Economists Usually Prefer Private Ownership to Public Ownership of Natural

question 69

Multiple Choice

Economists usually prefer private ownership to public ownership of natural monopolies because private owners have an incentive to:

• A)maximise cost as long as they reap part of the benefit in the form of lower profit
• B)minimise cost as long as they reap part of the benefit in the form of lower profit
• C)maximise cost as long as they reap part of the benefit in the form of higher profit
• D)minimise cost as long as they reap part of the benefit in the form of higher profit

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Definitions:

Liabilities

Obligations owed by a business to either creditors or suppliers, often in the form of loans or accounts payable.

Net Income

The amount of money a company has earned after all expenses, including taxes and costs, have been subtracted from total revenue.

Beginning Equity

The amount of owners' equity in a business at the start of an accounting period, reflecting the net value of the business's assets minus its liabilities.

Dividends

Payments made by a corporation to its shareholder members, often derived from the company's profits.