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

Journal Article (Journal Article)

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.

Full Text

Duke Authors

Cited Authors

  • Sweeney, RJ; Tower, E; Willett, TD

Published Date

  • January 1, 1977

Published In

Volume / Issue

  • 7 / 4

Start / End Page

  • 349 - 362

International Standard Serial Number (ISSN)

  • 0022-1996

Digital Object Identifier (DOI)

  • 10.1016/0022-1996(77)90052-6

Citation Source

  • Scopus