Commodity Taxation and the Effects of Entry: A Case of Variety Preferences
AbstractWe study the relationship between commodity taxation and the effect of entry with imperfect competition. We develop a simple general equilibrium model with imperfect competition in which consumers have variety preferences. As a result, we see that introducing specific taxes increases social welfare. Furthermore, we show that the optimal tax rule is contrary to the inverse elasticity rule. Copyright Springer-Verlag Wien 2004
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Bibliographic InfoArticle provided by Springer in its journal Journal of Economics.
Volume (Year): 83 (2004)
Issue (Month): 3 (December)
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Web page: http://www.springerlink.com/link.asp?id=108909
commodity taxation; entry; Ramsey rule; H21; L13; L16;
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- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
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