ABSTRACT
This chapter considers the linear programming (LP) model of the firm as a possible framework for understanding decision making in the firm on the central questions of which products should be produced and in what quantities. The LP model of the firm’s technology and supply constraints is intended to represent conditions applying in a short period of time in which production methods and productivity remain constant and some resources are in limited supply. A convenient way of building a bridge between traditional theory and the LP theory of the firm is to employ the latter’s framework to portray the single-product firm that is so strongly associated with the former. The LP framework is obviously well suited to the representation of short-term profit maximisation constrained, diluted or even replaced, by one or more purely short-term considerations.
