Editing Marginal cost (section)

== Empirical data on marginal cost ==
While [[Neoclassical economics|neoclassical]] models broadly assume that marginal cost will increase as production increases, several empirical studies conducted throughout the 20th century have concluded that the marginal cost is either constant or falling for the vast majority of firms.<ref name="lavoie">{{cite book |last=Lavoie |first=Marc |author-link=Marc Lavoie |title=Post-Keynesian Economics: New Foundations |year=2014 |publisher=Edward Elgar Publishing, Inc. |location=Northampton, MA |isbn=978-1-84720-483-7 |url=https://books.google.com/books?id=bv72AwAAQBAJ |page=151 }}</ref> Most recently, former [[Federal Reserve]] Vice-Chair [[Alan Blinder]] and colleagues conducted a survey of 200 executives of corporations with sales exceeding $10 million, in which they were asked, among other questions, about the structure of their marginal cost curves. Strikingly, just 11% of respondents answered that their marginal costs increased as production increased, while 48% answered that they were constant, and 41% answered that they were decreasing.<ref name="blinder et. al">{{cite book |last1=Blinder |first1=Alan S. |author1-link=Alan Blinder |last2=Canetti |first2=Elie R. D. |last3=Lebow |first3=David E. |last4=Rudd |first4=Jeremy B. |title=Asking About Prices: A New Approach to Understanding Price Stickiness |publisher=Russell Sage Foundation |location=New York |year=1998 |isbn=0-87154-121-1 |url=https://books.google.com/books?id=6OOFAwAAQBAJ }}</ref>{{rp|106}} Summing up the results, they wrote:
{{quote|...many more companies state that they have falling, rather than rising, marginal cost curves. While there are reasons to wonder whether respondents interpreted these questions about costs correctly, their answers paint an image of the cost structure of the typical firm that is very different from the one immortalized in textbooks.|''Asking About Prices: A New Approach to Understanding Price Stickiness'', p. 105<ref name="blinder et. al"/>}}
Many [[Post-Keynesian economics|Post-Keynesian economists]] have pointed to these results as evidence in favor of their own [[Heterodox economics|heterodox]] theories of the firm, which generally assume that marginal cost is constant as production increases.<ref name="lavoie"/>