Episode 48: Theory of the Firm

A discussion of the nature of the firm, the different types of firms, and the reasons for the existence of firms. This leads to an overview of the objectives of firms, including decisions regarding how to produce and the profit maximizing quantity to produce, and a discussion of the implications of this behavior for consumers and the economy at large. Recommended prelistening are Episode 12: The Price System and Episode 16: Profits and Competition.