Tax analysis in a limit pricing model

• Autores: Félix Marcos
• Localización: Documentos de Trabajo (ICAE), ISSN-e 2341-2356, Nº. 4, 1993, págs. 1-18
• Idioma: inglés
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• 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.