Microeconomics: Theory and Applications with Calculus, 4e

6.1 The Ownership and Management of Firms

A firm is an organization that converts inputs such as labor, materials, and capital into outputs, the goods and services that it sells. U.S. Steel combines iron ore, machinery, and labor to create steel. A local restaurant buys raw food, cooks it, and serves it. A landscape designer hires gardeners, rents machines, buys trees and shrubs, transports them to a customer’s home, and supervises the project.

Private, Public, and Nonprofit Firms

Atheism is a non-prophet organization.

Firms operate in the private, public, or nonprofit sectors. The private sector, sometimes referred to as the for-profit private sector, consists of firms owned by individuals or other nongovernmental entities whose owners try ...