| Sumario: | The article critically analyzes the concept given by economist R. R. Russell that the demand curve for a factor of production cannot slope upward under conditions of perfect competition in all markets. This concept is considered invalid for a number of reasons, even though his conclusion is valid. Moreover, the validity of the conclusion is itself of questionable usefulness, for it is dependent on incompatible assumptions. The article questions Russell's choice of assumptions. He assumes that the firm can expand output when the price of one factor falls, although the product price remains constant. But if all markets are competitive, the factor price must fall for all firms in the industry, and if the product price is to remain constant when all firms expand, the market demand curve must be perfectly elastic. This is a theoretical impossibility. A general proof of the proposition concerning the downward slope of the demand curve for a factor should take account of a consequent change in product price, and should also include the long-run case as well as the short run.
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