This document provides an overview of the theory of the firm, including:
1. Defining the firm and explaining its goal of profit maximization. Firms exist as an alternative to market allocation and their goal is to maximize profits.
2. Describing the main forms of business firms - proprietorships, partnerships, corporations, and cooperatives - and comparing their advantages and disadvantages.
3. Explaining the concepts of normal profit, economic profit, and how profit maximization is achieved by setting marginal revenue equal to marginal cost.
FellowBuddy.com is an innovative platform that brings students together to share notes, exam papers, study guides, project reports and presentation for upcoming exams.
We connect Students who have an understanding of course material with Students who need help.
Benefits:-
# Students can catch up on notes they missed because of an absence.
# Underachievers can find peer developed notes that break down lecture and study material in a way that they can understand
# Students can earn better grades, save time and study effectively
Our Vision & Mission – Simplifying Students Life
Our Belief – “The great breakthrough in your life comes when you realize it, that you can learn anything you need to learn; to accomplish any goal that you have set for yourself. This means there are no limits on what you can be, have or do.”
Like Us - https://www.facebook.com/FellowBuddycom
FellowBuddy.com is an innovative platform that brings students together to share notes, exam papers, study guides, project reports and presentation for upcoming exams.
We connect Students who have an understanding of course material with Students who need help.
Benefits:-
# Students can catch up on notes they missed because of an absence.
# Underachievers can find peer developed notes that break down lecture and study material in a way that they can understand
# Students can earn better grades, save time and study effectively
Our Vision & Mission – Simplifying Students Life
Our Belief – “The great breakthrough in your life comes when you realize it, that you can learn anything you need to learn; to accomplish any goal that you have set for yourself. This means there are no limits on what you can be, have or do.”
Like Us - https://www.facebook.com/FellowBuddycom
Macro Economics
For downloading this contact- bikashkumar.bk100@gmail.com
Prepared by Students of University of Rajshahi
Mohammad Abadullah
Dilruba Jahan Popi
Rabiul Islam
Effat Ara Saima
MD. Rajib Mojumder (Captain)
A firm is a Business unit which owns,controls and manages a plant.Such a Business unit may be a sole Proprietor,a partnership,a company or a cooperative enterprise.The Firm is the owner of the plant and it controls the operation of plants.
The classical doctrine—that the economy is always at or near the natural level of real GDP (full employment)—is based on two firmly held beliefs:
The assumption of the full employment of labour and other productive resources
Belief that prices, wages, and interest rates are flexible.
Keynesian Theory
In the long-run a firm can amend its size and organization to violate demand conditions. In other words, in the long-run the firm can adjust its scale of operations or size of plant to produce any required output in the most efficient way. Thus, in the long run fixed factors can be altered. Management can be restructured to run a firm of a different size. Capital can also be used differently. In short, all factors are variable in the long run and therefore the scale of operations can be altered
Macro Economics
For downloading this contact- bikashkumar.bk100@gmail.com
Prepared by Students of University of Rajshahi
Mohammad Abadullah
Dilruba Jahan Popi
Rabiul Islam
Effat Ara Saima
MD. Rajib Mojumder (Captain)
A firm is a Business unit which owns,controls and manages a plant.Such a Business unit may be a sole Proprietor,a partnership,a company or a cooperative enterprise.The Firm is the owner of the plant and it controls the operation of plants.
The classical doctrine—that the economy is always at or near the natural level of real GDP (full employment)—is based on two firmly held beliefs:
The assumption of the full employment of labour and other productive resources
Belief that prices, wages, and interest rates are flexible.
Keynesian Theory
In the long-run a firm can amend its size and organization to violate demand conditions. In other words, in the long-run the firm can adjust its scale of operations or size of plant to produce any required output in the most efficient way. Thus, in the long run fixed factors can be altered. Management can be restructured to run a firm of a different size. Capital can also be used differently. In short, all factors are variable in the long run and therefore the scale of operations can be altered
Presentation of Joint venture Technology Shagunpuri5
A joint venture is a business entity created by two or more parties, generally characterized by shared ownership, profitability and shared risks and shared governance.
Introduction to business finance by Ayesha Noor Ayesha Noor
Here is an introduction to what business finance is and what are the roles and responsibilities of financial manager. Includes various other business related terms.
Buy Verified PayPal Account | Buy Google 5 Star Reviewsusawebmarket
Buy Verified PayPal Account
Looking to buy verified PayPal accounts? Discover 7 expert tips for safely purchasing a verified PayPal account in 2024. Ensure security and reliability for your transactions.
PayPal Services Features-
🟢 Email Access
🟢 Bank Added
🟢 Card Verified
🟢 Full SSN Provided
🟢 Phone Number Access
🟢 Driving License Copy
🟢 Fasted Delivery
Client Satisfaction is Our First priority. Our services is very appropriate to buy. We assume that the first-rate way to purchase our offerings is to order on the website. If you have any worry in our cooperation usually You can order us on Skype or Telegram.
24/7 Hours Reply/Please Contact
usawebmarketEmail: support@usawebmarket.com
Skype: usawebmarket
Telegram: @usawebmarket
WhatsApp: +1(218) 203-5951
USA WEB MARKET is the Best Verified PayPal, Payoneer, Cash App, Skrill, Neteller, Stripe Account and SEO, SMM Service provider.100%Satisfection granted.100% replacement Granted.
VAT Registration Outlined In UAE: Benefits and Requirementsuae taxgpt
Vat Registration is a legal obligation for businesses meeting the threshold requirement, helping companies avoid fines and ramifications. Contact now!
https://viralsocialtrends.com/vat-registration-outlined-in-uae/
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
➢ SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
➢FreenBecky 1st Fan Meeting in Vietnam
➢CHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
➢ WOW K-Music Festival 2023
➢ Winner [CROSS] Tour in HCM
➢ Super Show 9 in HCM with Super Junior
➢ HCMC - Gyeongsangbuk-do Culture and Tourism Festival
➢ Korean Vietnam Partnership - Fair with LG
➢ Korean President visits Samsung Electronics R&D Center
➢ Vietnam Food Expo with Lotte Wellfood
"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
Memorandum Of Association Constitution of Company.pptseri bangash
www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
www.seribangash.com
Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
https://seribangash.com/promotors-is-person-conceived-formation-company/
Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
Visit : https://www.avirahi.com/blog/tata-group-dials-taiwan-for-its-chipmaking-ambition-in-gujarats-dholera/
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
RMD24 | Retail media: hoe zet je dit in als je geen AH of Unilever bent? Heid...BBPMedia1
Grote partijen zijn al een tijdje onderweg met retail media. Ondertussen worden in dit domein ook de kansen zichtbaar voor andere spelers in de markt. Maar met die kansen ontstaan ook vragen: Zelf retail media worden of erop adverteren? In welke fase van de funnel past het en hoe integreer je het in een mediaplan? Wat is nu precies het verschil met marketplaces en Programmatic ads? In dit half uur beslechten we de dilemma's en krijg je antwoorden op wanneer het voor jou tijd is om de volgende stap te zetten.
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...
Theory of a Firm
1. Unit 9
Theory of a firm
Objectives:
After going through this unit, you will be able to explain:
The concept and significance of the structure of the market
Types of market structures
Difference between competitive and non-competitive markets
Behavior of firms in various market structures
Equilibrium conditions in various market forms
Structure:
1.1 Introduction
1.2 Meaning of Business Firm
1.3 Forms of Business Firms
1.4
1.5
1.6
Goal of Business Firm
Profit – Normal and Economic profit
Profit maximization
1.1 Introduction
The productive efforts in the economy are summarized in a commercial unit called the
firm. The rationality behind doing business as firms, lies in the benefits of an organized
effort through multi-skilled, multi-functional teams, which work jointly towards
achievement of pre-defined goals, while utilizing scarce resources most efficiently. In
this sense firms can be viewed as systems comprising of subsystems and parts which are
integrated, coordinated, and interdependent. The following sections evaluate the concept
2. of a firm, its forms, and processes that help it achieve business goals efficiently and
effectively.
1.2 Meaning of Business Firm
A firm is a unit that does business on its own account. Firm is from the Italian word,
“firma” which means a signature, and the idea is that a firm can commit itself to a
contract. The firm is the decision-maker in supplying goods and services. It is an entity
that employs scarce resources to produce goods and services which are demanded by
consumers. The firm is an alternative system of allocation to the market, which exists
because in many case it is more efficient to organize production in a non-price
environment. As stated by Ronald Coase (1937), “Within a firm … market transactions
are eliminated and in place of the complicated market structure with exchange
transactions is substituted the entrepreneur-co-coordinator, who directs production.”
1.3 Forms of Business Firms
There are four main kinds of firms in modern market economies:
Proprietorship
A proprietorship (or proprietary business) is a business owned by an individual, who is
called the “proprietor”. A proprietorship Some proprietorship are too small even to
employ one person full time. Craftsmen, such as plumbers and painters, may have “day
jobs” and work as self-employed proprietors part time after hours. Computer
programmers and others may also do that. At the other extreme, some proprietary
businesses employ many hundreds of workers in a wide range of specializations. In a
proprietorship, the proprietor is almost always the decision-maker for the business.
Partnerships
A partnership is a business jointly owned by two or more persons. In most partnerships,
each partner is legal liable for debts and agreements made by any partner. Of course, this
requires a great deal of trust, and thus partners generally know one another well enough
3. to have that sort of trust. Family partnerships are very common for that very reason.
There are now a few “limited partnerships” in which some partners are protected from
legal liability for the agreements made by others, beyond some limits. In many cases, one
partner is designated as the managing partner and is the main decision-maker for the
business.
Corporations
A corporation has two characteristics that distinguish it from most proprietorships and
partnerships:
Limited liability
Anonymous ownership
Limited liability means that the owner of shares in a corporation cannot lose more than a
certain amount if the company fails. Usually the amount is the money paid to buy the
shares. Anonymous ownership means that the owner of the shares can sell them without
getting the permission of anyone other than the buyer. By contrast, in most partnerships,
no one partner can sell out without getting the agreement of the other partners. In such a
case the continuing partners will, of course, want to know about the new partner -- he will
not be an “anonymous owner”. In a typical corporation, the shareholders formally elect a
board of directors, who in turn select the officers of the company. One of these officers,
often called the “president”, will be the principle decision-maker for the firm, but he will
be expected to make decisions in the interest of the shareholders.
Co-operative
A co-operative is a corporation organized by people with similar needs to provide
themselves with goods or services or to make joint use of their available resources to
improve their income. Their business structure ensures:
all members have an equal say (one vote per member, regardless of the number of shares
held);
open and voluntary membership;
limited interest on share capital;
4. surplus is returned to members according to amount of patronage.
There is no requirement to incorporate as a co-operative in order to run a business
collectively and cooperatively.
While there is millions of proprietorship, typically very small, the biggest businesses are
corporate and corporations are particularly important because of their size. The following
table brings out the advantages and disadvantages of various business forms:
Sole Proprietorship
Advantages Disadvantages
ease of formation unlimited liability
low start-up costs difficulty raising capital
less administrative paperwork than somelack of continuity in business organization in
other organizational structures (such asthe absence of the owner
incorporation)
owner in direct control of decision making
minimal working capital required
tax advantages to owner
all profits to owner
Partnership
Advantages Disadvantages
ease of formation unlimited liability (for general partners)
low start-up costs lack of continuity
additional sources of investment capital divided authority
broader management base hard to find suitable partners
possible development of conflict between
partners
Corporation
Advantages Disadvantages
limited liability closely regulated
specialized management most expensive form to organize
ownership is transferable charter restrictions
continuous existence extensive record keeping necessary
separate legal entity double taxation of dividends
possible tax advantage (if you qualify for
small business tax rate)
easier to raise capital
5. Co-operative
Advantages Disadvantages
owned and controlled by members longer decision making process
democratic control: one member, one vote requires members to participate for success
limited liability extensive record keeping necessary
profit distribution (surplus earnings) toless incentive to invest additional capital
members in proportion to use of service;
surplus may be allocated in shares or cash
possibility of development of conflict
between members
Goal of Business Firm - Profit and profit maximization
Profit is the main reason firms exist. In economic theory, profit is the reward for risk
taken by enterprise. Put simply, profit is a firm’s total revenue (TR) minus total cost
(TC), calculated through the following equation,
Profit = TR - TC
Economists distinguish between normal profit and economic profit
Normal profit is understood as the opportunity cost of using entrepreneurial abilities in
the production of a good, or the profit that could be received by entrepreneurship in
another business venture. Marshall has stated that normal profit is that rate of minimum
profit which a firm must earn in order to survive in the market. If profit is any lower than
that, then enterprise would be better off engaged in some alternative economic activity
On the other hand, a firm is said to be making an economic profit when its revenue
exceeds the total (opportunity) cost of its inputs. This can be used as another name for
“economic value added” (EVA). For example, a person invests Rs.100, 000 to start a
business, and in that year earns Rs.20, 000 in profits. The accounting profit would be
Rs.20, 000. However, the same year he could have earned an income of Rs.45, 000 had
he been employed. Therefore, he has an economic loss of Rs.25, 000 (120,000 - 100,000
- 45,000). A firm is said to be making an economic profit when its average total cost is
less than the price of the product at the profit-maximizing output. The economic profit is
equal to the quantity output multiplied by the difference between the average total cost
and the price
6. Profit maximization
In economics, profit maximization is the process by which a firm determines the price
and output level that returns the greatest profit. This can be obtained by two approaches,
viz.,
Point at which TR exceeds TC by the greatest margin
Point at which MR = MC
It is imperative to note the following points to understand the firm’s profit maximization
goal:
A firm is said to be making an economic profit when its average total cost is less than the
price of the product at the profit-maximizing output. The economic profit is equal to the
quantity output multiplied by the difference between the average total cost and the price.
A firm is said to be making a normal profit when its economic profit equals zero. This
occurs where average cost equals price at the profit-maximizing output.
A firm is said to be making a zero economic profit when its marginal revenue equals
marginal cost.
If the price is between average total cost and average variable cost at the profit-
maximizing output, then the firm is said to be in a loss-minimizing condition. The firm
should still continue to produce, however, since its loss would be larger if it was to stop
producing. By continuing production, the firm can offset its variable cost and at least part
of its fixed cost, but by stopping completely it would lose equivalent of its entire fixed
cost.
If the price is below average variable cost at the profit-maximizing output, the firm is said
to be in shutdown. Losses are minimized by not producing at all, since any production
would not generate returns significant enough to offset any fixed cost and part of the
variable cost. By not producing, the firm loses only its fixed cost.
To summarize on the profit maximization goal, consider the following figure,
7. Economic Objectives
Market share
Profit margin
Return on investment
Technological advancement
Customer satisfaction
Shareholder value
Goal of the firm Profit Maximization
Non-economic Objectives
Workplace environment
Product quality
Service to community
Goal of Business Firm - Maximizing stock prices
The goals of maximizing stock prices, in turn maximizing share holder’s wealth, is an
objective for firms that are publicly traded. However, firms that are private have another
crucial goal i.e. the maximization of the firm’s value. Since firm value is not directly
observable and has to be calculated, these kinds of firms can not enjoy a major benefit
that publicly held ones can – they are deficient in the feedback that other ones may get
due to a policy change, a new project take over or also while making chief decisions.
Goal of Business Firm – Maximizing Productivity
Productivity is the amount of output created (in terms of goods produced or services
rendered) per unit input used. For instance, labour productivity is typically measured as
8. output per worker or output per labour-hour. With respect to land, the “yield” is
equivalent to “land productivity”.
An increase in productivity not only maximizes output per unit of input for the firm, it
also can influence society more broadly, by improving living standards, and creating
income. They are central to the process generating economic growth and capital
accumulation. Companies can increase productivity in a variety of ways. The most
obvious methods involve automation and computerization which minimize the tasks that
must be performed by employees. Recently, less obvious techniques are being employed
that involve ergonomic design and worker comfort.
Goal of Business Firm – Satisficing
Satisficing is a behavior which attempts to achieve at least some minimum level of a
particular variable, but which does not necessarily maximize its value. The most common
application of the concept in economics is in the behavioral theory of the firm, which,
unlike traditional accounts, postulates that producers treat profit not as a goal to be
maximized, but as a constraint. Under these theories, a critical level of profit must be
achieved by firms; thereafter, priority is attached to the attainment of other goals.
The word satisfice was coined by Herbert Simon as a portmanteau of “satisfy” and
“suffice”. Simon pointed out that human beings lack the cognitive resources to maximize:
we usually do not know the relevant probabilities of outcomes, we can rarely evaluate all
outcomes with sufficient precision, and our memories are weak and unreliable.