Revisiting Cournot and Neoclassical Economics

Cournot influenced neoclassical economics deeply on two significant issues. First, on the issue of the price taking concept and horizontal demand curve for the firm, by the misinterpretation of his price stability condition by the neo-classical theorists. And second, on the issue of the number of firms in perfect competition, by his erroneous perception for infinite number of firms as neces-sary for perfect competition, whereas the main feature of perfect competition is zero profit due to competition.These misconceptions led neoclassical and mainstream economics to wrong models and outcomes. The most serious implication is that the equilibrium point in perfect competition is not at the minimum point of the average cost curve, as neoclassical economics argues, but at a higher cost, which, in turn, has further implications on the social welfare