Theory on the Functions of A Firm: A Resolution to Smith’s Dilemma

Zhong-Yuan Han, Shu-Lin Wang

Abstract


Based on Stigler’s (1951) conjecture, this article reproves the Smith theorem (the division of labor is limited by the extent of the market), via a framework of perfect competitive market, consequently offering a solution to Smith’s dilemma which usually refers to the incompatibility between the Smith theorem and the theory of competitive price.

Full Text: PDF DOI: 10.5430/jms.v3n1p18

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This work is licensed under a Creative Commons Attribution 3.0 License.

Journal of Management and Strategy
ISSN 1923-3965 (Print)   ISSN 1923-3973 (Online)

 

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