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Than costs of market transaction superseded by it, and benefits from redistribution
Activity there are big, than firm costs on their organisation. No
Needs in detailed research of the nature of this decision, as it already
It is considered in my former article.
But the firm is not the unique possible answer to this problem.
Administrative costs of the organisation of transaction in firm also can
To appear big, and especially when many very different kinds
Activity are reduced under management of the uniform organisation. In a standard case
Infringements of rest and order because of pollution by a smoke which can concern
Sets of the people, engaged in the most different affairs, administrative costs
Can appear so big that will make useless any attempts
Settlements of a problem within the limits of one firm. The alternative decision is
Legitimate rights which can change a configuration through market transaction,
The government can impose an obligatory rule for performance,
Establishing what exactly people should or cannot do, and to which it
It is necessary to submit. So, the government (force of the law or, can be with
- probability, through any administrative body) can, that
To cope with a problem of infringement of rest and an order because of pollution by a smoke,
The interdiction for coal or oil use), or can limit any
Areas of possibility of conducting certain business (zoning).
The government in a sense represents superfirm (but very much
Special kind) as it is capable to influence use of factors
Manufactures by means of administrative decisions. Activity of usual firm
It is supervised by a competition of other firms which can operate the same
Activity with smaller costs, and also that always is
Alternative exit in the form of market transaction, if the administrative
Costs become too big. The government if will wish, can in general
To bypass the market that firm to make not in a status. The firm should conclude
Agreements with owners of its used factors of manufacture. Just as
The government can mobilise or grasp the property as it can
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