Profitable Cost Increases and the Shifting of Taxation : Equilibrium Response of Markets in Oligopoly
This paper considers the conjectural variations model of oligopoly and introduces a shift in its equilibrium solution : a cost-side shift, such as a change in technology or input prices, or the introduction of excise tax. The equilibrium effects of this cost-displacement are then found, deriving and examining explicit expressions for the resulting movements in individual outputs and hence in price, profits and market structure. The main motivation we offer for the exercise is methodological : to derive, for the model adopted, certain industrial-organization results of general interest and applicability, which we then put to work mostly in a more specific public finance context. The results we are referring to are, very simply, the comparative statics (of our model) of oligopoly, in response to changes in costs. It is indeed surprising that the problem is not one which has been treated systematically in the literature except for particular cases, such as special functional forms and / or symmetric industry
|Date of creation:||1985|
|Date of revision:|
|Contact details of provider:|| Postal: CV4 7AL COVENTRY|
Phone: +44 (0) 2476 523202
Fax: +44 (0) 2476 523032
Web page: http://www2.warwick.ac.uk/fac/soc/economics/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:wrk:warwec:260. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Robyn Till)
If references are entirely missing, you can add them using this form.