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" The main reason why it is profitable to establish a firm would seem to be that there is a cost of using the price mechanism. The most obvious cost of 'organizing' production through the price mechanism is that of discovering what the relevant prices are. "

Ronald Coase

Price

Why

Organizing

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" In my long life, I have known some great economists, but I have never counted myself among their number nor walked in their company. "

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" Roughly speaking, when you are dealing with business firms operating in a competitive system, you can assume that they're going to act rationally. Why? Because someone in a firm who buys things at $10 and sells them for $8.00 isn't going to last very long in that firm. "

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" There is no doubt that the recognition by economists of the importance of the role of the firm in the functioning of the economy will prompt them to investigate its activities more closely. "

Ronald Coase

Recognition

Economy

" The tools used by economists to analyze business firms are too abstract and speculative to offer any guidance to entrepreneurs and managers in their constant struggle to bring novel products to consumers at low cost. "

" You get more irrationality within the family and in consumer behavior than you get, say, in the behavior of firms in their purchases. "

" You wouldn't think there was a need for a Coase Theorem, really. "

" What I have done is to show the importance for the working of the economic system of what may be termed the institutional structure of production. "

" I'm no enthusiast for the Coase Theorem. I don't like it, but it's widely used. "