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Wasteful Imports Due to Domestic Monopoly in a Spatially Differentiated Market

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  • Klaus Stegemann

Abstract

In a spatially differentiated market the actual rate of importation, in the absence of government intervention, exceeds the socially optimal rate for two reasons: either domestic production that would be socially advantageous may not be viable at all from a private point of view, or an existing import-competing monopoly finds it profitable to serve less than the socially optimal market area.

Suggested Citation

  • Klaus Stegemann, 1981. "Wasteful Imports Due to Domestic Monopoly in a Spatially Differentiated Market," Working Paper 427, Economics Department, Queen's University.
    • Handle: RePEc:qed:wpaper:427
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