Answer to Question #299081 in Microeconomics for munna

Question

A firm is described as combining managerial coordination with market exchange in order to produce its good or service. Does similar behavior occur in government bureaus? Explain.

Answer 1

Yes, government bureaucracies use an approach comparable to private enterprises in ensuring production efficiency by integrating management coordination with market exchange. This is because government bureaucracies in the managerial sector are made up of commissions and boards that aid in the coordination of activities. The Department of Energy is an example of such a bureau. In a market framework, however, operation bureaus are more likely to behave like monopolies, as they face no competition.