Multi-product Firms

T. V. S. Ramamohan Rao ()
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T. V. S. Ramamohan Rao: Indian Institute of Technology Kanpur

Chapter Chapter 5 in Managerial Discretion in Imperfect Markets, 2023, pp 85-98 from Springer

Abstract: Abstract Most corporations produce a variety of related products. They also utilize an appropriate geographic spread of their production and retail outlets for the sale of their products. Economies of scale and scope, embodied in the technology of the available capital stock, determine the portfolio of the choices. The interrelationships between the demands for the products will also have an effect on such choices. Most of the studies consider the efficiency of organizing production of the multiplicity of products as the more important determinant of the portfolio of the products. The emphasis was on the internal capital market for the efficient determination of the product mix. However, managerial discretion regarding the group of products that are independent of the others affects the performance of the firm. Similarly, an efficient allocation of the fixed resources of the firm is inadequate for the efficient performance. Several dimensions of managerial discretion have been noted. The issue of an efficient mechanisms design remains intractable.

Date: 2023
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DOI: 10.1007/978-981-99-1537-8_5

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