Competition and Co-operation in Dairy farm Feed Supplies: Every Player Wins a Prize

In economics, the theory of the firm holds that firms exist as entities to carry out activities that they can do relatively better than others in the economy. The type of activities a firm engages in, and those activities a firm does not carry out and ‘farms out’ instead, are determined by whether the firm can do it cheapest or another firm can do it cheaper. This consideration, summarized as comparative advantage and transaction costs, determines the boundaries of the firm, defining and encompassing what the firm does and does not do.