Which of the following is the best example of a business whose primary goal is to earn a profit?

• A. A privately owned restaurant
• B. A government-run hospital
• C. A charitable food bank
• D. A public elementary school

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of a business's primary goal. In microeconomics, a business is typically defined as an organization that produces goods or services with the main objective of earning a profit.
2. Step 2: Analyze each option to determine whether its primary goal is profit maximization. For example, a privately owned restaurant operates to generate revenue exceeding its costs, aiming to make a profit.
3. Step 3: Consider the nature of government-run hospitals, charitable food banks, and public elementary schools. These institutions usually focus on providing public services or aid rather than earning profits.
4. Step 4: Compare the objectives of each option. Since the privately owned restaurant is the only one primarily motivated by profit, it fits the definition of a business in microeconomic terms.
5. Step 5: Conclude that the best example of a business whose primary goal is to earn a profit is the privately owned restaurant.