ABSTRACT
However, Kahn claimed that, in normal conditions, ‘the marginal cost curve is rising very steeply’ (Kahn, 1989, p. 87). So the L-shaped average cost curve is presented as the extreme case of the more general assumption of rising marginal costs. In fact, Kahn did not reintroduce the L-shaped cost curve in his so-called multiplier article, although he reiterated there the claim that ‘at times of intense depression, when nearly all industries have at their disposal a large surplus of unused plant and labour, the supply curve is likely to be very elastic’ (Kahn, 1972, pp. 10-11).1
