A neglected welfare cost of monopoly - and most other product market distortions
Article Abstract:
The welfare cost resulting from resource supply distortion, a monopoly's neglected consequence, tends to be more immense than their usually estimated welfare cost counterparts. Utilization of a general equilibrium model revealed that the size of welfare cost resulting from distortion in the quantity of resources supplied is five to fifteen times larger than the usual 'Harberger triangle' output mix distortion. Other economic policies create resource supply effects that tend to be more vital than their usual output market effect counterparts.
Publication Name: The Journal of Public Economics
Subject: Government
ISSN: 0047-2727
Year: 1997
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Political structure, taxes, and trade
Article Abstract:
Non-cooperative tax policies imposed by independent jurisdictions in a chain of markets result to a decrease in trade volume, assuming that the different organizations set taxes at levels that maximizes their net revenues. A similar level of revenue and increased trade volume, however, could be achieved by monopolization of the chain of markets and sharing of revenues.
Publication Name: The Journal of Public Economics
Subject: Government
ISSN: 0047-2727
Year: 1997
User Contributions:
Comment about this article or add new information about this topic:
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