| Sumario: | The article focuses on demand curve for a factor of production. The mathematical impossibility of a positively inclined demand curve for a factor of production, under conditions of perfect competition in both the factor and product markets, has been irrefutably established. However, to the mathematically unsophisticated, this theoretical conclusion remains somewhat mystical or at least unsubstantiated by a more graphic analysis. It is, indeed, difficult to reconcile this central theorem of economic theory with the salient case of a positively sloped demand curved for a consumer's good. The layman's sceptism is not easily allayed by the explanation that the firm's reaction to a factor price change involves nothing comparable to the consumer's income effect; for the contention that the only production effect is something similar in character to the substitution effect is not wholly accurate. The crucial question that must be asked is not whether the theory of the firm involves something similar to the consumer's income effect, but whether this scale effect can be negative.
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