The ranking of alternative tariff and quota policies in the presence of domestic monopoly
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Bhagwati demonstrated the nonequivalence between tariffs and quotas in the presence of 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 and 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 that 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 re-emerges. © 1977.
Published Version (Please cite this version)10.1016/0022-1996(77)90052-6
Publication InfoSweeney, RJ; Tower, E; & Willett, TD (1977). The ranking of alternative tariff and quota policies in the presence of domestic monopoly. Journal of International Economics, 7(4). pp. 349-362. 10.1016/0022-1996(77)90052-6. Retrieved from https://hdl.handle.net/10161/1960.
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Professor Emeritus of Economics
Professor Tower specializes in finance, computable general equilibrium modeling, macroeconomics, development economics, microeconomics, and managerial economics. He conducts a majority of his research within the study of trade and development, exploring a variety of variables from tariffs, quotas, and time zone arbitrage, to equities, mutual funds, and index mutual funds. Since he began publishing his work in 1965, he has contributed over 130 articles to leading academic journals and has had s