This article throws light upon the top five methods used for reconciliation of differing optima of firm. 1. If the technical optimum is greater than the managerial optimum, the gap has to be covered by measures aiming at enhancing managerial efficiency. Or the firm has to split the productive organisation into different separate departments in order to take advantage of [...]
After reading this article you will learn about:- 1. Definitions of the Size of a Firm 2. Measures of Size 3. Concepts. Definitions of the Size of a Firm: In an industry there are firms of varying sizes. The costs of production in these firms of different sizes vary. Economists are concerned with the best size of a business unit, [...]
The factors that determine the best size of the business units (the optimum size of the firm) are studied under the following five groups: 1. Technical Factors 2. Managerial Factors 3. Financial Factors 4. Marketing Factors 5. Factors of Risks and Fluctuations. 1. Technical Factors: Technological factors underline the need for enlarging the scale and size of operations of a [...]