7. Mid-Term Review and The Theory of the Firm
![Introduction to Micro](https://cdn.mises.org/styles/responsive_4_3_650w/s3/static-page/img/Introduction%20to%20Micro_Rothbard.jpg.webp?itok=fDhAV-Y4 650w,https://cdn.mises.org/styles/responsive_4_3_870w/s3/static-page/img/Introduction%20to%20Micro_Rothbard.jpg.webp?itok=Iolwd_9u 870w,https://cdn.mises.org/styles/responsive_4_3_1090w/s3/static-page/img/Introduction%20to%20Micro_Rothbard.jpg.webp?itok=0TTkXrCF 1090w,https://cdn.mises.org/styles/responsive_4_3_1310w/s3/static-page/img/Introduction%20to%20Micro_Rothbard.jpg.webp?itok=yiEarfSS 1310w,https://cdn.mises.org/styles/responsive_4_3_1530w/s3/static-page/img/Introduction%20to%20Micro_Rothbard.jpg.webp?itok=8XJLcfb6 1530w)
The objective of the corporate firm is to maximize profits and avoid losses - the same objective of the free market. But the costs are paid out before the income comes in. Stockholders will sell stock to shake up the managers. Government firms - agencies - do not have shareholders and there are no shares to be sold.
Part 7 of 14. Presented in 1986 at New York Polytechnic University.