ON THE EFFECTS OF COMMODITY TAX UNDER FREE ENTRY OLIGOPOLY IN THE PRESENCE OF EXPORT MARKET

Yasuhito Tanaka ()

International Economic Journal, 1992, vol. 6, issue 3, pages 83-92

Abstract: If the inverse demand function in the domestic country is concave, or it is not too convex even if it is convex, a small specific commodity tax raises the social welfare in the domestic country and lowers the welfare of the foreign consumers, and the optimal tax for the domestic country is positive. The presence of an export market enlarges the possibility that a specific commodity tax raises the social welfare in the domestic country at the sacrifice of the welfare of the foreign consumers. [L13]

Date: 1992
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