Professor Chamberlain’s theory of monopolistic competition is both a new theory of prices, the resultant of monopolistic and competitive forces, and a general reassessment of the theory of the firm, the author introducing new variables alongside the traditional price variable. These characteristics show the work’s originality and explain why, in his preface to the French edition, Professor Perroux speaks of Professor Chamberlain’s ‘General Theory’… His book begins where the traditional theory of value leaves off.

The establishment of a multiple, rather than a double classification of markets was the most far-reaching contribution of the new theory. It meant, although it wasn’t wholly foreseen at the time, the end of the faith in competition in the old sense. Now there were alternatives to the implausible assumption of competition without going to the implausible case of monopoly. The competition of many sellers, like the control of a market by one, soon came to be regarded as an extreme or limiting case.

[Its success]…was as much due to the force and brilliance of the exposition as it was to the maturity of the scientific situation. The work claimed to reconstruct the whole of value theory by blending or fusing the hitherto separate theories of monopoly and competition. Nor was this all. It also claimed to teach a new economic Weltanschauung from the standpoint of which practically all economic problems appear in a new light… A whole literature that amplified and applied these contributions followed in its wake.