Article
A note on location and the output effect of ad-valorem taxes under free entry oligopoly
Economics and Business Letters
(2015)
Abstract
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 well-known Tanaka’s result in non-spatial economy. It indicates that oligopolistic firm’s location decision has important influence on the output effect of the ad-valorem tax.
Keywords
- ad-valorem taxes,
- output and location,
- free entry undifferentiated oligopoly
Publication Date
March, 2015
DOI
10.17811/ebl.4.1.2015.30-35
Publisher Statement
©2015 Oviedo University Press. This article was published in Economics and Business Letters, volume 4, issue 1, 2015. It is also available at this link.
This article is published under a Creative Commons Attribution-Non Commercial-Non Derives 3.0 Spain (legal text). You can copy, use, distribute, transmit and publicly display, provided that: i) you cite the author and the original source of publication (journal, publisher and URL of the work), ii) they are not used for commercial purposes, iii) mentions the existence and specifications of this license.
Citation Information
Shieh, Y.-N. (2015) A note on location and the output effect of ad-valorem taxes under free entry oligopoly. Economics and Business Letters, 4(1), 30-35. https://www.unioviedo.es/reunido/index.php/EBL/article/view/10407 DOI: 10.17811/ebl.4.1.2015.30-35
Creative Commons license
This work is licensed under a Creative Commons CC_BY-NC-ND International License.