Firms are a ubiquitous feature of the economic landscape, with much of the activity undertaken within an economy taking place within their boundaries. Given the size of the contribution made by firms to economic activity, employment and growth, having a theoretical understanding of the nature and structure of firms is crucial for understanding how an economy functions.

The Theory of the Firm firstly offers a brief overview of the past, consisting of a concise discussion of the classical view of production, followed by an outline of the development of the neoclassical...