Abstract:
monopoly. This paper also assumes domestic production to be monopolized, and shows that
giving import licenses or tariff revenues to the domestic producer may raise or lower the
welfare cost of protection alnd the price paid by consumers from the price under other tariff
and quota arrangements which maintain the same market share for the domestic producer.
However, if the monopolist realizes &at commercial policy is an instrument used to maximize
the policymaker’s welfare function, instead of being a goal in itself, the equivalence of tariffs
and quotas reemerges.
