Coase – Price Mechanism And The Entrepreneur
Coase believed that it was important to enquire ?why co-ordination is the work of the price mechanism in one case and the entrepreneur in the other?. How did Coase ultimately explain the choice between the alternatives Using an industry of your choice illustrate how Coase?s theory of the firm helps explain the organisation of firms within that industry.
Introduction
Based predominantly on the work ?The Nature of the Firm? (1937), in which R.H. Coase explored, in depth, the reasons for the emergence of organisational management through entrepreneurialism in the economic environment, this paper aims to outline and explain the concept of co-ordination of the factors of production, and the place of the price mechanism and role of the firm within the economic system.
We will also attempt to highlight the threshold of the price mechanism and entrepreneurial co-ordination, and explain that upon which the choice between alternatives is based, whilst endeavouring to apply our conclusions towards practical example from Ireland?s modern-day industrial environment.
Price Mechanism & the Entrepreneur
The key to resolving the conflict between the independent price mechanism and managerial forms of co-ordination within the economic system is to interpret and understand the cost advantages and disadvantages of using the market, or command and
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