A Privately Owned Firm That Is Regulated by the Government

question 8

Multiple Choice

A privately owned firm that is regulated by the government is very similar to a firm that the government owns because:

• A) both make economic profits.
• B) neither have a profit motive.
• C) both minimize costs.
• D) both result in no deadweight loss.
• E) neither earn economic profits.

---

Definitions:

Operating Activities

Activities that relate to a company’s primary business operations, including revenue and expense transactions affecting net income.

Interest

The cost of borrowing money, typically expressed as an annual percentage of the principal loan amount.

Long-Term Bank Loan

A debt financing obligation issued by a bank or financial institution to a company, with a repayment period exceeding one year.

Operating Activities

Business activities directly related to the production, sale, and delivery of a company's products or services, often reflected in the cash flow statement.