3 The Economic Theory of the Firm
Objectives and Learning Outcomes
This chapter introduces how economics provides a general way to understand the activities of businesses and how basic economic principles drive management thinking. After a brief characterization of such principles, this chapter introduces the economic relationships of demand and supply in a standard framework that can be used for a type of model known as static analysis. Drawing the connection to management, the chapter shows how this approach can be applied as the basic theory of the firm, bringing together technical and organizational aspects in the form of cost functions and market characteristics in the form of revenue functions. On this basis, ...
Get Practical Management for the Digital Age now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
