The Construction of Long-Run Market Supply Curves: Some Notes on Sraffa’s Critique of Partial Equilibrium Analysis

Giuseppe Freni and Neri Salvadori

Chapter 9 in Sraffa and the Reconstruction of Economic Theory: Volume Three, 2013, pp 189-216 from Palgrave Macmillan

Abstract: Abstract The 1925 paper by Piero Sraffa, ‘On the relations between cost and quantity produced’, originally published in Italian in Annali di Economia as ‘Sulle relazioni fra costo e quantità prodotta’, proposes a thorough and devastating criticism of Marshallian economics based on the method of partial equilibrium analysis of competitive prices. Just five years later Sraffa has no hesitation in concluding his contribution to the 1930 Economic Journal Symposium on Increasing Returns and the Representative Firm with the advice that Marshall’s Theory ‘should be discarded’ (Sraffa, 1930, p. 93). Note that Sraffa will never reconsider this issue, at least in published contributions, with the notable exception of a very brief hint in the Preface of his 1960 book, Production of Commodities by Means of Commodities.

Keywords: Demand Curve; Reservation Price; Cost Curve; Partial Equilibrium; Supply Curve (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-31404-8_10

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DOI: 10.1057/9781137314048_10

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