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Theory Of The Firm-are Firms J
Firms are in business for a simple reason: To make money. Traditional economic theory suggests that firms make their decisions on supply and output on the basis of profit maximisation.
However many Economists and managerial Scientists in our days question that the sole aim of a firm is the maximisation of profits.
The most serious critique on the theory of the firm comes from those who question whether firms even make an effort to maximise their profits. A firm (especially a large corporation) is not a single decision-maker
, but a collection of people within it. This implies that in order to understand the decision-making p ....
Word count: 1231 - Page count: 5
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