ABSTRACT
Several issues have been raised concerning the neo-classical models of the firm. These
traditional models, namely, perfect competition, monopoly, monopolistic competition
and oligopoly, are all subsumed under the label of marginalist models of the firm. This
label derives from the way in which equilibrium (profit maximization) is achieved in
all the models through the equating of the firm’s marginal cost with marginal revenue.
From around the 1950s, these traditional theories have been seriously challenged and
alternatives offered. In the same way that the traditional models were developed and
modified to meet the changes in the business and productive sectors, newer models
have emerged to take into account largely empirical changes observed in the market.
Many of the newer alternatives tend to tread a thin line between economics and
management.
