A firm’s production, cost and profit: A systems-based axiomatic approach

Date

2023

Authors

Forrest, Jeffrey Yi-Lin
Darvishi, Davood
Jallow, Abdou K.
Li, Zhen

Journal Title

Journal ISSN

Volume Title

Publisher

National Association of Business, Economics and Technology

Abstract

This paper looks at how an individual firm’s system of values and beliefs, as reflected in the firm’s mission statement, influences the firm’s decision making. Based on a minimal level of intuition and common knowledge, four axioms are adopted as the starting points for deriving consequent conclusions, while explaining why other commonly employed assumptions should be abandoned. On the backdrop of a set-theoretic setup, the concepts of production and profit functions are investigated innovatively so that unnecessary assumptions, widely appearing in the current microeconomic theory, can be naturally avoided. Other than generalizing several known results in producer theory, such as Hotelling’s Lemma, examples are introduced to show that these known results are not universally true when different systems of values and beliefs are considered. This work concludes with several suggestions for future research of expected significance.

Description

Keywords

Economic theory, Business optimization, Decision-making situations

Citation

This is the published version of an article that is available at http://nabet.us/j_archives/JBET_2023.pdf. Recommended citation: Forrest, J. Y.-L., Darvishi, D., Jallow, A. K., & Li, Z. (2023). A firm’s production, cost and profit: A systems-based axiomatic approach. Journal of Business, Economics and Technology, 26(1), 29–46.. This item has been deposited in accordance with publisher copyright and licensing terms and with the author’s permission.