Traditional theories of the hearty were based around models that assumed a passive industry, where thee potent is assumed to be a expediency maximiser and in its simplest terms, has an industry equilibrium at a profit-maximizing level of prices and quantities. There have been some(prenominal) objections to the handed-down theory, which has pushed for several economists to screw up with a new theory, which may correct roughly of the problems found inherently within the original theory. One such economist is Edith Penrose, whos Theory of the Growth of the Firm helps to give a practically private warm perspective, but does this theory give a more acceptable perspective than the traditional theory to that point where the traditional theory quarter be scraped?
        The traditional theory of the firm is based on the idea that firms argon rational and fare the single objective of profit maximization as single owners are greedy and desire only money. This theory shows that firms pull up stakes produce where their Marginal Costs are equal to their Marginal Revenues and that tout ensemble factors affecting the firm are known, i.e. the industry has perfect knowledge. Under this assumption all factors remain unchanged i.e. the demand, supply and technology all form at the same level and therefore the prices and outputs of the firm are defined by this equilibrium state of the singular intersection firm. But this theory has come under scrutiny for several reasons.
        One of the main objections of this theory is that the objective of profit maximsation is too simple and it does not take into consideration the multiple objectives that a firm will have in reality. Theorists agree that profit maximization is important to the long run survival of the firm but there are several other objectives that a firm may follow. Hall and Hitch pointed out...
its an average essay, done just breif skim reading, Business studies is a hard yield to do but capturing the key points is essential in writting a informative piece of work, sometimes hard work can go to waste if the essay doesnt reach its key issues addressed, again it was structured well and it should have deserved a much greater mark
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