7. Mid-Term Review and The Theory of the Firm
The objective of the corporate firm is to maximize profits and avoid losses - the same objective of the free market. But the costs are paid out before the income comes in. Stockholders will sell stock to shake up the managers. Government firms - agencies - do not have shareholders and there are no shares to be sold.
Part 7 of 14. Presented in 1986 at New York Polytechnic University.
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