Third, this article contributes to the recognition of the important Italian contribution to economic theory in the early 20 th century. The equilibrium of a discretely-sized firm in a competitive industry is an ambivalent compromise between logical consistency built around a long-run notion of constant costs, on the one hand, and descriptive realism built around short-run notions of fixed cost and increasing returns, on the other. Second, it shows that the complications surrounding the concept, its history and attribution are not coincidental. First, it establishes primacy of contribution and clarifies a common misunderstanding: Barone, Edgeworth and Sraffa share the development of a concept habitually attributed either to Marshall or Viner. Presenting the history of the U-shaped average cost curve, a key element of microeconomic theory, this article fulfils a triple purpose.
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May 2023
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