The ranking of alternative tariff and quota policies in the presence of domestic monopoly

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.