DISAGREEMENTS ON CONDITIONS FOR UNANIMITY

This paper considers two articles which have appeared in this journal on the subject of shareholder unanimity. It argues that their differing conclusions arise in part from errors in the analysis and in part from radically different assumptions about the structure of the economies in which shareholder decisions are made.     

A note on the role of the average cost curve in the neoclassical theory of the firm

A number of influential authors have argued that the long-run average cost curve has only a limited role in the theory of the firm. This note examines this claim in more detail. It argues that the curve has an important role in determining long-run equilibrium as it provides an important ‘signal’ to agents in the capital and product market about the extent to which an industry is in disequilibrium. The effect of removing the certainty assumption is then examined and it is argued that the average cost curve is an important input in the assessment of operating risk.     

AN ECONOMIC ANALYSIS OF VALUE TO THE OWNER

This short paper applies the economists' concept of consumer surplus to the accountants' concept of value to the owner. It is shown that the two relevant concepts of consumer surplus - the equivalent consumer surplus and the compensating consumer - result in valuations that differ from the traditional Solomons, et al., analysis. This proposition is established by use of traditional neoclassical demand theory. It is also shown that whilst the analysis is essentially of a short run nature this is also true of the accountants' concept of value to the owner.