Which Statement Reflects the Main Purpose of Private Sector Firms

question 12

Multiple Choice

Which statement reflects the main purpose of private sector firms in the Canadian economy? Firms:  

• A) They are assumed to be socially responsible. 
• B) They have responsibilities for providing services that the government cannot provide. 
• C) They are assumed to try to maximize profit. 
• D) They seek to maximize sales.

Recognize the impact of decision-making biases and their role in the innovation process.

Understand the concept of organizational cultural lag and its implications for innovation.

Recognize the importance of creativity and innovation in organizational success.

Understand the role of intrinsic and extrinsic motivation in creativity and innovation.

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Definitions:

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes towards covering fixed costs and generating profit.

Machine Hours

A measure of production time, calculated as the total hours that machinery is operated over a specific period.

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, indicating the contribution of sales to covering fixed expenses.

Machine Hours

A measure of the amount of time a machine is operated, used as a basis for allocating manufacturing overhead to products.