225. Harrod to Joan Robinson , 13 December 1931 [a]

[Replies to 224 ]

Ch[rist]. Ch[urch, Oxford].

13 December 1931

Dear Ms Robinson

I must thank you very much for your correction. You are right of course; the curve must be tangential to the curve at P and should lie above . [1] This was a foolish error due to haste. I put in the paragraph around the diagram and the diagram as an afterthought. Your conclusion that the "long period equilibrium in an imperfect market is attained when the particular demand curve is a tangent to the long period average cost curve" is an interesting one and seems to be right. [2] That the curve lies below the (round about P) curve follows from my argument in the footnote. If w is total cost per unit,

w = y

and (i.e. curves are tangents)

My article was also marred by a misprint [b] in the first footnote on that page where "average marginal" has somehow crept in for "average prime". [3]

Have you seen Viner's article in the Zeitschrift für Nationaloekonomie? [4] I have just got it but havent had time to peruse it.

I was sorry not to have seen Austin on Tuesday. I wandered about more or less under the dictatorship of Rylands. [5]

Yours very sincerely

Roy Harrod

  1. 1. Harrod, "The Law of Decreasing Costs" ( 1931:2 ), p. 571:

    represents the demand curve, the total cost curve.

    2. The matter was discussed again with respect to Harrod's and Robinson's notions of "normal profit": see in particular letter 295 , [jump to page] .

    3. Harrod, "The Law of Decreasing Costs" ( 1931:2 ), p. 571n1.

    4. J. Viner, "Cost Curves and Supply Curves" (1931). Harrod later wrote to Viner in this connection; the letter is not extant, but Viner's reply is reproduced here as letter 227 .

    5. Austin Robinson, and "Dadie" Rylands.

    1. a. ALS, one page, in JVR vii/191/1.

      b. Ms: «missprint».


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