ABSTRACT
In the neoclassical theory of the firm the firm is treated as a unitary agent. Or, to put it somewhat more accurately, the entrepreneur is implicitly considered to be the personification of the firm. Firm behaviour is equated with the behaviour of the entrepreneur. What goes on within firms remains in the dark; the firm is analysed as a black box. As a matter of fact, in Chapter 2 we have seen that proponents of the theory argue that the neoclassical theory of the firm does not even purport to be a theory of the behaviour of individual firms. It is a theory (or, better, a building block in the theory) of industries, of markets. Industry behaviour is studied as the outcome of the behaviour of firms.
