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Efficiency open for them possibility of increase of incomes.] it is final, on

The business the point in which firm expansion stops, can be defined Joint action of several factors set forth above. First two of them With the greatest probability correspond to statements of economists about

"Decreasing profitableness of management". p. 242 - 257)., 44, short, Robinson Austin, incomplete.

More detailed consideration of this problem see at Kaldora (Kaldor,

"Equilibrium of the Firm", of course, "The Problem of Management and

the Size of Firms "//Economic Journal, June 1934 and This analysis is It has been above told that the firm will extend until costs on

The organisation of one additional transaction in firm will not be made even with

Costs on realisation of the same transaction through an exchange in the open market

Or with costs on its organisation through other firm. But if firm Stops expansion at value of costs smaller, than in the open market, and Equal to costs on the organisation through other firm, in most cases (for

Definition of this term is given by an exception of a case of "combination" more low) it

Will mean that between two these manufacturers the market is carried out

The transaction though each of them would be capable to organise it with costs

Smaller, than now. How it is possible to resolve this paradox? It becomes clear with

The help of a following example. We will assume that And buys something at In and thus And

And In could organise this market transaction with costs smaller, than The flowing. We will assume that In will organise not one process or a stage

Manufactures, but a little. If And will want to avoid market transaction, to it

It is necessary to incur all manufactures supervised In processes. Until then,

While Instead of will incur all processes of manufacture, market transaction will be

To be saved, though and on other products, than before. But earlier we have assumed,

That each manufacturer in process of business expansion reduces the efficiency;

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