Critique of Neoclassical Theory of The Firm
Keen's work (as opposed to his popularization) has also focused on refuting the neoclassical theory of the firm, which argues that firms will set marginal revenue equal to marginal cost. Keen notes that empirical research finds real firms set price well above marginal cost: they charge a markup, often cost-plus pricing; compare fellow post-Keynesian Alfred Eichner, who also argued for markup pricing.
He cites Eiteman & Guthrie, finding 89% of firms set prices above the level where marginal revenue is equal to marginal cost, as well as more recent work by Alan Blinder.
Keen's article on "profit maximization, industry structure, and competition" has had counter-arguments by Paul Anglin.
Read more about this topic: Steve Keen
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