The Firm As A Heat Engine

The firm is at the heart of microeconomics. For a firm to thrive, it must make a gross profit. Several of the concepts of firms and microeconomics are analogous to those concerning thermodynamics and heat engines.

For example, thermal energy removed from the hot reservoir \(Q_H\) is analogous to revenue (R). Thermal energy exhausted into the cold reservoir \(Q_C\) is analogous to cost (C).