ABSTRACT
The first criticism is one that is fairly easily remedied within the general framework of the marginal analysis by the simple process of adding new variables. The second criticism of the marginal analysis is more fundamental. It is directed, not at the details, but at the basic assumption of profit maximization itself. The criticism takes two forms: the first is that profit maximization is simply not what firms in fact do; the second is that even if firms wanted to maximize profits, there is no way of doing it. At the level of elementary teaching the proposal to ban the marginal analysis can perhaps be defended on the grounds that economics can get along so well without it. Economists may even become useful to business! This extension of theory will not, however, overthrow the existing structure of analysis, which emerges clearly as an important special case.
