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Concept of a Firm

Concept of a Firm - Similarly supply is an outcome of the...

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Concept of a Firm A firm is the smallest unit of production or sale. Microeconomic theory is an equilibrium analysis . It is concerned with the behavior of demand and supply forces. Marshall is reported to have said that demand and supply are like two blades of a pair of scissors. Demand is a result of the utility -maximizing behavior of a consumer in rational bounds.
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Unformatted text preview: Similarly supply is an outcome of the profit-maximizing behavior of a firm, again in rational bounds. Firms may have different organizational forms. A firm may be an individual enterprise, a partnership, a joint stock company , a corporate body, a cooperative enterprise or a public utility agency....
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