Theories of the Firm

  • Jacqueline Cannon
  • Patricia M. Hillebrandt


The large firm is a phenomenon of the 20th century. At the time of the development of micro-economics, the typical firm was small and owner-controlled. The owner took risks backed by his own capital, and was accountable only to himself. Economists focused on such a firm, within markets where products were standardised, buyers and suppliers were large in number and well informed about the conditions prevailing in these markets, and where prices were set by the market forces. That is perfect competition.


Transaction Cost Large Firm Family Firm Traditional Theory Joint Stock Company 


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Copyright information

© The University of Reading 1989

Authors and Affiliations

  • Jacqueline Cannon
  • Patricia M. Hillebrandt

There are no affiliations available

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