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Highlights the theory of competition advanced by da Empoli in the late 1920s. The main point is the existence of discontinuities in industrial concerns. This leads to the possibility that prices exceed marginal costs and depend also on ultramarginal costs, a new concept elaborated by da Empoli. They are costs that are incurred when the firm is producing beyond the marginal production. Also reviews the various implications of this approach. Stresses the innovative character of his approach and evaluates this in relation to contemporary and successive literature.

Emphasizes some aspects of ultra‐marginality in Attilio da Empoli’s main contributions and argues that those concepts could have provided a prelude to a wider reconsideration of dynamic theory in political economy.

Considers the contribution of Attilio da Empoli to the theory of value and distribution and especially his contribution to the theory of monopolistic competition. During the 1920s a lively discussion developed about the link between the cost structure of the individual firm and the degree of competition in the wake of the demise of the Marshallian concept of the “representative firm”. In this context, Attilio da Empoli contributed two monographs with the declared intent to provide a new theory of value. While falling short of this ambitious objective, shows that Attilio da Empoli formulated a number of original insights that were fully developed only many years later. The two most important of these concern the contestability of markets (“external competition”) and the inadequacy of the Cournot solution for spatially differentiated firms that compete with otherwise identical products.