Sam Bostaph writes about the long run competitive equilibrium model   
being "model-building driven." I suspect that this is true for some   
writers and may be the reason for Gold's research.  
  
However, the phenomenon of increasing cost is a derivative of the   
concept of diminishing marginal utility applied to a fixed set of   
consumer goods. And the concept of decreasing costs up to a point is   
just an obvious deduction from the fact that the human capital used by   
the entrepreneur is indivisible, unique and embodied in the mind of a   
single individual (I believe that Kaldor made this point in a 1930s   
paper). One doesn't need a mathematical model to realize the importance   
of the theorem that competition drives the price down to the lowest that   
entrepreneurs regarded as attainable (but not to zero because of rising   
opportunity cost -- i.e., diminishing marginal utility of other goods),   
without causing the entrepreneurs to fragment into neutrons and protons.   
Indeed, having to learn the mathematical model may distract the student   
who thinks that economics is applied mathematics. But it seems to me   
that the assumptions behind the u-shape are essential and, it would   
seem, couched in the fundamental reality of scarcity and the nature of   
human decision-making.  
  
Of course, we are not talking here about the long run of Allyn Young or   
Frank Knight, perhaps more appropriately called the long, long run. We   
are talking about the conceptual long run, which is what the micro   
textbooks try to (or ought to try to) capture.  
  
Kaldor, Nicholas. (1934) "The Equilibrium of the Firm." Economic Journal   
44: 60-76. Reprinted in Nicholas Kaldor. (1960) Essays on Value and   
Distribution. Glencoe, Ill.: The Free Press.  
  
Best wishes,  
  
Pat Gunning