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Question
Assertion (A): Private sector enterprises focus primarily on profit maximization.
Reasoning (R): Profit motive is the driving force behind the decisions and operations of private businesses.
Options
A is true but R is false.
A is false but R is true.
Both A and R are true and R explains A.
Both A and R are true but R does not explain A.
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Solution
Both A and R are true and R explains A.
Explanation:
Private sector enterprises are owned and controlled by private businessmen, and their main objective is earning profits. Profit provides the reward for risk taken and the return on capital invested. Therefore, profit motive is indeed the driving force behind their decisions and operations. This explains why they focus primarily on profit maximization. Therefore, both statements A and R are true, with statement R providing an explanation for statement A.
