Abstract
This microeconomic study of the firm addresses dynamic processes such as financing, capital investment, marketing investments and labor planning. It lies in the nature of these activities that they are fully dynamic and therefore best analyzed in a fully dynamic frame of reference. A comprehensive dynamic optimal treatment has only been feasible the last decade or so with the development of new mathematical techniques, such as optimal control theory. The study also addresses the current issue of the dissipation of the power of the owners of the firm and the consequent increase in power of other groups in a firm such as managers and labor. The main objective of the dissertation is to develop some microeconomic models of the dynamic economic behavior of firms that maximize other goals than profit alone. The managerial and labor-managed firms are studied in this respect in an optimal control theory framework, and the results are compared with those of the profit-maximizing firm. Also the effect of non-constant discount rates on some dynamic optimal economic model of the firms, is studied. An important reason for analyzing growth and dynamic economic behavior at the level of the firm is that growth in society is determined to a significant extent by firms.