The Origins of the U-Shaped Average Cost Curve: Understanding the Complexities of the Modern Theory of the Firm
Keppler, Jan-Horst; Lallement, Jérôme (2006), The Origins of the U-Shaped Average Cost Curve: Understanding the Complexities of the Modern Theory of the Firm, History of Political Economy, 38, 4, p. 733-774. http://dx.doi.org/10.1215/00182702-2006-018
TypeArticle accepté pour publication ou publié
Journal nameHistory of Political Economy
MetadataShow full item record
Abstract (EN)The article discusses the origins of the U-shaped average cost curve, which is one of the most widely used tools in microeconomic analysis. Its widespread use leads many to consider it as a basic tool, obscuring the fact that the graph of the U-shaped average cost curve is part of a complex theoretical construct that didn't emerge until the 20th century. The curve's complexity stems from a careful balance between increasing returns and perfect competition, short-run and long-run considerations of production, and logical consistency, a balance that was first stated by the successors of Alfred Marshall, who are detailed in the article.
Subjects / KeywordsPerfect competition; Economic systems; Microeconomics; Cost curve; Theory of the firm
Showing items related by title and author.
Smith - Debreu : social Interaction and Mathematical Metaphors. Origin and conclusion of the Principal Scientific Research Project in Economic Theory Keppler, Jan-Horst (2007-09) Communication / Conférence