The book discusses the views of Alfred Marshall and Arthur Cecil Pigou on competition and the theory of the firm.
Pigou, on the other hand, presented a logical system where perfect competition occurs when firms produce at a level where marginal cost equals price.
He explained that firms operate at less than full capacity due to falling demand curves and maximization of profits at a certain output level.
Robinson highlights the limitations and simplifications made in Pigou's analysis, particularly in terms of assumptions about demand conditions and the concept of price policy in manufacturing industries.
The book is presented as a box of tools for analytical economists, but it acknowledges that the direct contribution to understanding the real world is limited.
The gap between the tool-makers and tool-users is recognized, as economists often provide poor or misleading information to practical individuals.
It also explores the effect of changes in demand on individual sellers' costs and analyzes the supply curve of a commodity under perfect competition.
It introduces definitions and considerations related to the buyer's position and examines the relationship between monopoly, monopsony, and perfect competition.