This course introduces theories that explain the sizes, scopes, internal structures, and the kinds of contractual relations that characterize business firms. Issues addressed include: why firms exist, how firms are established, and what contributions firms make to the economy. The course provides innovative models of economic equilibrium that endogenously determine the structure and function of economic institutions. The role of an entrepreneur as a decision maker is analysed in details. In addition to the role of a producer, the firm as an intermediary and as a market maker is also discussed.