The Division of Labor is Limited by the Extent of the Market

  title={The Division of Labor is Limited by the Extent of the Market},
  author={George Joseph Stigler},
  journal={Journal of Political Economy},
  pages={185 - 193}
  • G. Stigler
  • Published 1 June 1951
  • Economics
  • Journal of Political Economy
ECONOMISTS have long labored with the rate of operation of firm and industry, but they have generally treated as a (technological?) datum the problem of what the firm does-what governs its range of activities or functions. It is the central thesis of this paper that the theorem of Adam Smith which has been appropriated as a title is the core of a theory of the functions of firm and industry, and a good deal more besides. I shall (i) make some brief historical remarks on the theorem, (2) sketch… 
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