Perfect competition and increasing returns A partial equilibrium analysis

Pierre Dehez () and Jacques Drèze
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Pierre Dehez: Université catholique de Louvain, LIDAM/CORE, Belgium
Jacques Drèze: Université catholique de Louvain, LIDAM/CORE, Belgium

No 2026002, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: The purpose of the present paper is to challenge the standard textbook analysis of perfect competition based on profit maximisation and the associated "price equal marginal cost" rule leading to an increasing market supply curve.

Keywords: Competitive equilibrium; increasing returns to scale; pricing rule (search for similar items in EconPapers)
JEL-codes: D21 D41 (search for similar items in EconPapers)
Pages: 10
Date: 2026-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2026002

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