Paul Anglin criticised our analysis of the neoclassical theory of the firm, but makes a number of incorrect assertions about our assumptions. We correct these misunderstandings, but acknowledge that one criticism he makes is correct. We correct this
flaw with a new argument that supersedes the flawed strategic reaction argument we presented in our previous paper.
We have previously presented a critique of the standard Marshallian theory of the firm, and developed an alternative formulation that better agreed with the results of simulation. An incorrect mathematical fact was used in our previous presentation.
This paper deals with correcting the derivation of the Keen equilibrium, and generalising the result to the asymmetric case. As well, we discuss the notion of rationality employed, and how this plays out in a two player version of the game.
