A Primary Operating Objective of a Business Is to Increase

question 153

Multiple Choice

A primary operating objective of a business is to increase the equity of its owner or owners by:

• A) Acquiring assets.
• B) Incurring liabilities.
• C) Earning a profit.
• D) Incurring expenses.
• E) Increasing retained earnings.

---

Definitions:

Marginal Revenue

The increase in revenue from the sale of one more unit of a product or service.

Natural Monopoly

A market situation where a single supplier can provide a good or service more efficiently than any potential competitor, often due to high initial setup costs.

Local Phone Company

A telecommunications company that provides phone services primarily within a local or regional area.

Making a Profit

The financial gain realized when the revenue gained from a business activity exceeds the costs, expenses, and taxes involved in sustaining the activity.