Abstract
Casual empiricism strongly suggests that businesses are predominantly of the multiproduct variety. This phenomenon has not escaped the attention of economists who have addressed the decision problem of such a firm in a variety of ways. The standard references to the long-run decision calculus of the multiproduct firm are Hicks [7] and Henderson and Quandt [6]. These classics were generalized to admit conditions of monopoly in the product market and/or monopsony in the factor market by Mauer and Naylor [10]. Pfouts [13] added another important contribution by considering the presence of fixed factors of production which could be transferred to different employments within the firm. Building upon the analysis contained in Pfouts [13], Dhrymes [4] considered a multiproduct monopolist facing random demand functions. Due to the complexities of that problem, Dhrymes found it convenient to assume that the monopolist had a concave and quadratic von Neumann-Morgenstern risk preference function.
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