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Profit and Expenditure Functions in Basic Public Finance: An Expository Note


  • Greenberg, Edward
  • Denzau, Arthur T


This paper demonstrates how profit and expenditure functions may be used to pr ove fundamental results about the deadweight losses suffered by consu mers, producers, and resource owners. Losses arising from excise taxe s and subsidies are examined and, in the case of a tax, the individua l level analysis is extended to the market level in a partial equilib rium setting. In addition, profit and expenditure functions are appli ed to quantity constraints, two-part tariffs, all-or-nothing choices, and reservation prices. Although no new results are derived, the pap er provides motivation for the study of indirect objective functions and duality. Copyright 1988 by Oxford University Press.

Suggested Citation

  • Greenberg, Edward & Denzau, Arthur T, 1988. "Profit and Expenditure Functions in Basic Public Finance: An Expository Note," Economic Inquiry, Western Economic Association International, vol. 26(1), pages 145-158, January.
  • Handle: RePEc:oup:ecinqu:v:26:y:1988:i:1:p:145-58

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    Cited by:

    1. Peck, Richard M., 1998. "The inefficiency of the poll tax," Journal of Public Economics, Elsevier, vol. 67(2), pages 241-252, February.

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