Do most government agencies actively use the formula MC = MR?
Multiple Choice
A- Yes - They routinely do this to reduce cost and maximize tax revenues.
B- Yes - But they normally concentrate on the MC because tax revenues are already stable.
C- No - Government does not use this formula and there is no formula or graph in modern day economics that can explain the logic of how government operates.
D- All of the responses above are wrong.
Solution is Option C.
The government doesn't look to maximise profits as it aims to maximise public welfare by funding and borrowing and hence adds onto debt which minimises profits in long run. Hence, MC equals MR as rule is not applicable.
Do most government agencies actively use the formula MC = MR? Multiple Choice A- &n...
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