Evaluate the Following Analogical Argument

question 21

Short Answer

Evaluate the following analogical argument:
In Great Britain,savings of between 20 and 40 percent in costs have resulted from selling government-run programs and businesses to individuals and companies in the private sector.This argues well for the administration's interest in selling such U.S.government entities as the Bonneville Power Administration,the Tennessee Valley Authority,and various parts of the postal service.
The terms of the analogy are not clear:Which (or at least what kind of)British programs and businesses were sold off? Would the sales be handled similarly (with regard to terms of payments,for example)? Would the government subsidize private ownership for a period of time after the sale? How would general differences in the economic structures of the United States and Great Britain affect the argument?

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Definitions:

AVC

Average Variable Cost; the total variable costs divided by the quantity of output produced.

ATC

Average Total Cost, which is the total cost divided by the quantity of output produced, representing the per-unit production cost.

Marginal Product

The additional output derived from the addition of one more unit of a variable input, holding all other inputs constant.

Marginal Cost

refers to the increase in cost when producing one additional unit of output.