Book Series
Theories of the Firm Fifth Edition Demetri Kantarelis |
Introduction |
A business firm is a needs-satisfying machine; it is an entity invented and employed by
society to better satisfy the society's interests. A society is better off when properly
regulated business firms are allowed to carry the bulk of economic activity than when
they are not allowed to exist or are severely regulated by the state. And, as history has
documented, societies fare better when they are dependent on such business firms than
when they are dependent on central planning.
The business firm generates consumer satisfaction in return for income that gets
distributed to its owners, employees, suppliers and public goods recipients. Any firm of
any size is in existence because:
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