Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/189145 
Year of Publication: 
1991
Series/Report no.: 
Queen's Economics Department Working Paper No. 821
Publisher: 
Queen's University, Department of Economics, Kingston (Ontario)
Abstract: 
This paper compares ad valorem and specific taxation in two models of oligopoly, with and without free entry. Predominantly ad valorem taxation implies a relative low consumer price, high tax revenue and (when entry is precluded) low profits. Ad valorem taxation dominates specific from the welfare perspective: the set of circumstances under which (with free entry) specific taxation raises welfare is a strict subset of that in which ad valorem taxation is welfare-improving, and in both models the maximization of consumer welfare subject to a binding revenue constraint requires maximum reliance on ad valorem taxation.
Document Type: 
Working Paper

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