Theory of The Firm
In the context of the theory of the firm, a risk neutral firm facing risk about the market price of its product, and caring only about profit, would maximize the expected value of its profit (with respect to its choices of labor input usage, output produced, etc.). But a risk averse firm in the same environment would typically take a more cautious approach.
Read more about this topic: Risk Neutral
Famous quotes containing the words theory of the, theory of, theory and/or firm:
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