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Demand, Technology, and the Theory of the Firm

  • Victor J. Tremblay
  • Carol Horton Tremblay
Chapter
Part of the Springer Texts in Business and Economics book series (STBE)

Abstract

One of our goals is to understand the forces that influence firm behavior. The principal constraints derive from consumers (demand), nature (technology), and competitors. Demand derives from consumers who strive to maximize their utility or satisfaction within their budget and other constraints. When tastes are under the full control of consumers, firms take market demand as given. That is, demand is exogenously determined. This is the basis of consumer sovereignty—consumer preferences determine what firms produce.

Keywords

Demand Curve Average Cost Profit Maximization Total Revenue Marginal Revenue 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  • Victor J. Tremblay
    • 1
  • Carol Horton Tremblay
    • 1
  1. 1.Department of EconomicsOregon State UniversityCorvallisUSA

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