The size of the firm.
“It should be noted that most inventions will change both the costs of organising and the costs of using the price mechanism. In such cases, whether the invention tends to make firms larger or smaller will depend on the relative effect on these two sets of costs. For instance,
if the telephone reduces the costs of using
the price mechanism more than it reduces the
costs of organising, then it will have the effect of reducing the size of the firm.”
(Coase 1937, p. 397n.)
