Protection and the Product Line: Monopoly and Product Quality

Kala Krishna ()

International Economic Review, 1990, vol. 31, issue 1, 87-102

Abstract: The product-line decision of a monopolist is analyzed and used to study the effect of specific and ad valorem taxes on the entire product line. While specific taxes (or quotas) raise average quality, ad valorem taxes may not. The welfare consequences of such policies when the monopolist is a home one and when he/she is a foreign one are discussed. With a home monopolist, both specific and ad valorem subsidies are welfare improving, while with a foreign monopolist their welfare properties depend on the distribution of consumers. Copyright 1990 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 1990
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Working Paper: Protection and the Product Line: Monopoly and Product Quality (1985)
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