Why Do Firms Engage in the Activity of Production

question 158

Multiple Choice

Why do firms engage in the activity of production?

• A) to help society advance technologically
• B) to participate in the circular flow
• C) to acquire profits
• D) to develop a supply schedule

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Definitions:

Dividends Paid

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

Retained Earnings

The portion of a company's profits not distributed to shareholders as dividends but kept within the company to reinvest in business operations or pay down debt.

Average Tax Rate

The total amount of tax paid divided by taxable income.

Taxes

Mandatory financial charges or levies imposed by a government on individuals, entities, or transactions to fund public expenditure.