A note on location and the output effect of ad-valorem taxes under free entry oligopoly

• Autores: Yeung-Nan Shieh
• Localización: Economics and Business Letters, ISSN-e 2254-4380, Vol. 4, Nº. 1, 2015, págs. 30-35
• Idioma: inglés
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• Resumen

  • This paper examines the output effect of an ad-valorem tax of undifferentiated oligopolistic firms in the Weber-Moses triangle. It shows that an increase in the ad-valorem tax will increase each firm’s output but may increase the number of firms and total output of firms if the inverse demand function is linear, concave or not too convex. This result is different from the wellknown Tanaka’s result in the non-spatial economy. It indicates that oligopolistic firm’s location decision has important influence on the impact of the ad-valorem tax on the number of firms and total output of undifferentiated oligopoly.