Endogenous Product Differentiation and Trade Policy: Implications for the U.S. Food Industry

D. Kent Lanclos and Thomas Hertel

American Journal of Agricultural Economics, 1995, vol. 77, issue 3, 591-601

Abstract: The effects of tariffs on intermediate inputs and final goods in monopolistically competitive industries are assessed. Output per firm and firm numbers decline due to input tariffs. When coupled with output tariffs, the change in firm numbers is ambiguous. Numerical illustrations for U.S. food processing industries indicate the decline in firm numbers is larger than the decrease in firm output for input tariffs. Monopolistic competition strengthens the response to input tariffs compared to perfect competition. Considering the joint effects of input and output tariffs, the direction of change in total output may differ between monopolistic and perfect competition.

Date: 1995
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:77:y:1995:i:3:p:591-601.

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