Ch. 8 Outline - Chapter 8 Outline Costs and the Supply of...

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Chapter 8 Outline Costs and the Supply of Goods Econ 1B, Spring 2010 A. The Firm – Arnold 1. Theory of the Firm (focus in this class) Team production theory - Armen Alchian and Harold Demsetz - “Production, Information Costs, and Economic Organization” American Economic Review 62 (Dec. 1972): 777-795 b. Transaction cost theory – Ronald Coase “The Nature of the Firm” Economica (Nov. 1937) 2. Types of organizational structure for firms - ownership and liability a. b. c. d. 3. Balance sheet of firms a. b. B. Why do firms exist? Ronald Coase – The Firm, 1929 1. Markets are efficient a. It is a matter of costs 1) 2) b. Management 1) 1
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2) 2. As firms become larger a. Less market allocation b. More management allocation c. Principal agent problem 1) 2) 3) a) b) c) C. Production and costs 1. A model or theory of the firm a. b. 2. The profit motive a. b. c. 3. Do firms really maximize profit? a. Quality
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Ch. 8 Outline - Chapter 8 Outline Costs and the Supply of...

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