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- Title
Rejoinder.
- Authors
Eiteman, Wilford J.
- Abstract
This article presents a rejoinder by the author to his critics. It is pointed out that if the average cost curve starts curving upward even slightly, the marginal curve shoots upward rapidly, so that the conditions of marginal analysis are met by his curve No. 6. Mathematically this is true but businessmen do not know much about mathematics. The description that accompanied curve No. 6 was intended to suggest a situation in which the least cost point was so near to capacity and the subsequent rise of average costs was so slight as to reorder the difference between curve 6 and 7 insignificant. In this respect the curve was deficient but discussion with a few businessmen who answered the questionnaire suggests that they interpreted the curve as he intended. One critic admits that businessmen are not guided by considerations of marginal revenue and costs but he contends that the theory, when properly understood, explains business behavior nevertheless. In those cases in which the "guiding principles" of businessmen happen to lead to the same result as conventional theory suggests, the explanation offered by conventional theory does not conflict with facts.
- Subjects
BUSINESSPEOPLE; COST analysis; BUSINESS; REVENUE; BUSINESSMEN; CRITICS; MATHEMATICS; STATISTICS
- Publication
American Economic Review, 1953, Vol 43, Issue 4, p628
- ISSN
0002-8282
- Publication type
Article