IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-1-349-15484-5_4.html
   My bibliography  Save this book chapter

Profit, Growth and Sales Maximization

In: Readings in Industrial Economics

Author

Listed:
  • John Williamson

Abstract

One of the more discredited concepts in the theory of the firm is that of an ‘optimum size’ of firm. Empirical evidence has provided no substantiation for the thesis of a long-run U-shaped cost curve and, since firms are not restricted to the sale of a single product or even a particular range of products, there is no more reason to expect profitability to decline with size than there is evidence to suggest that it does. This raises the question as to what does limit the size of a firm. The answer that has been given is that there are important costs entailed in expanding the size of a firm and that these expansion costs tend to increase with the firm’s rate of growth. This view was first advanced by Edith Penrose [7], has been most fully developed by Robin Marris [5], and has received its most elegant formulation in a paper by Professor Baumol [2] (pp. 34–45 above).

Suggested Citation

  • John Williamson, 1972. "Profit, Growth and Sales Maximization," Palgrave Macmillan Books, in: Charles K. Rowley (ed.), Readings in Industrial Economics, chapter 4, pages 46-66, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-15484-5_4
    DOI: 10.1007/978-1-349-15484-5_4
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-1-349-15484-5_4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.