How does the sum of all the world's public company revenues compare to the total of private...


How does the sum of all the world's public company revenues compare to the total of private company revenues?

Gross Domestic Product:

Both public and private companies in the world contribute to the global Gross Domestic Product (GDP). The servicing quality, production levels, economic role, and charges on products and services determine the amount of revenue made by companies.

Answer and Explanation:

Most of the public companies are usually under control by the government. The authority acts as the central power to give directions about how these organizations should operate. Since public organizations are useful in providing welfare to the general public, moderation of prices occurs to protect the lower economic class of people. These facilities include healthcare centers and schools. On the contrary, private companies charge more in the same facilities but provide quality and high ranking services that attract many consumers from the middle and upper economic classes hence gathering much revenue.

Private companies put all their efforts into making profits whereas public organization focuses at helping the lower classes by the moderation of costs to lift their living standards. Most of the monopolies are also under government control, where they are used to control economic stability by lowering and raising charges under distinct economic conditions. These reasons make public companies have lower gross revenue compared to the private sector that raises a lot of income.

Learn more about this topic:

Gross Domestic Product: Using the Income and Expenditure Approaches

from Economics 102: Macroeconomics

Chapter 4 / Lesson 2

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