Commercial Policy and Imperfect Discrimination by a Foreign Monopolis t

Shabtai Donnenfeld

International Economic Review, 1988, vol. 29, issue 4, 607-20

Abstract: This paper examines the effects of commercial policy and the qualit y of imports that are supplied by a multiproduct foreign monopolist. Th e author finds that a specific quota on some imported products leads to upgrading of the quality of imports and enhances national welfare. A specific tariff, which does not lead to a decrease in the varieties of imported products , does not affect the quality of imports and result s in enhanced national welfare. In contrast, an ad valorem tariff leads to lower qualities of imported goods and lowers consumer surplus. A general quota is undesirable since it results in a lower quality of imports and lower national warfare. Copyright 1988 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 1988
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