Tax analysis in a limit pricing model
ISSN: 2341-2356
Año de publicación: 1993
Número: 4
Páginas: 1-18
Tipo: Documento de Trabajo
Otras publicaciones en: Documentos de Trabajo (ICAE)
Resumen
This paper deals with taxation, profits of firms and welfare. More specifically it analyses the effect of a lump sum tax on a noncompetitive market with free entry. The main result is that there are relevant situations in which the tax increases the profits of the incumbent firms. Unfortunately this goes with a reduction in consumer suplus (and in social welfare measured by consumer surplus, plus profits of firms plus revenues of the Government). But a way is suggested and some examples given in which that problem can be overcome.