THEORY OF THE FIRM IN ECONOMICS
Keywords:
Theory of the firm, microeconomics, transaction costs, agency theory, profit maximization, market structures, resource-based view, firm behavior, organizational economics, decision-making.Abstract
The theory of the firm is a cornerstone of microeconomics, exploring
the behavior, organization, and objectives of firms within various market structures.
This article reviews the evolution of the theory, from classical perspectives focusing
on profit maximization to modern approaches that integrate transaction costs, agency
theory, and behavioral economics. The discussion highlights key models, such as the
neoclassical model, Coase's transaction cost theory, and the resource-based view,
emphasizing their implications for firm decision-making, market dynamics, and
policy formation. By examining the interplay between firms' internal mechanisms and
external environments, the article provides a comprehensive framework for
understanding how firms adapt and compete in an increasingly complex global
economy.
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