Abstract: This article explores the conditions of labor-managed firms in an imperfect competition. It extends its analysis to a case where the firm is selling its product in an imperfect market. A cooperative or labor-managed firm whose level of employment is decided by the state could hardly remain a truly independent labor-managed enterprise. Fully independent labor-managed cooperatives are thus appropriate only in those industries in which there is room for many small-scale enterprises of an efficient scale and in which entry for new competing concerns is easy.

　　Subjects: COOPERATIVE societies; COMPETITION, Imperfect; MONOPOLIES; CONSUMER cooperatives; SMALL business; BUSINESS enterprises