Assertion (A): In microeconomics, a large company is treated as ‘macro’ because of its large size.
Reason (R): A large company has to act in the interest of its own shareholders, which is not necessarily the interest of the country as a whole.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A) is false but (R) is true.
A large company is still ‘micro’, not ‘macro’.
Assertion (A): In microeconomics, a large company is treated as ‘macro’ because of its large size. — False. Even a large company is ‘micro’. Size does not decide it.
Reason (R): A large company has to act in the interest of its own shareholders, which is not necessarily the interest of the country as a whole. — True. This is the very reason the company counts as micro.
NCERT (2026-27): “Introduction … In other words, microeconomics was a study of individual markets of demand and supply and the ‘players’, or the decision-makers, were also individuals (buyers or sellers, even companies) who were seen as trying to maximise their profits (as producers or sellers) and their personal satisfaction or welfare levels (as consumers). Even a large company was ‘micro’ in the sense that it had to act in the interest of its own shareholders which was not necessarily the interest of the country as a whole. …” |