AD VALOREM AND SPECIFIC TAXES, AND OPTIMAL PIGOUVIAN TAX WITHIN COURNOT OLIGOPOLY

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Abstract

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First, we analyze the effects of a shift from specific to ad valorem taxation within Cournot oligopoly under general conditions on demand and cost functions. Second, we analyze the optimal Pigouvian tax rate for controlling emission of pollution within Cournot oligopoly also under general conditions. The second analysis is an adaptation of the analytical method adopted in the first analysis.

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