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author:

Chen, Shih-Shen (Chen, Shih-Shen.) [1] | Hung, Ken (Hung, Ken.) [2] | Tsai, Chien-Shu (Tsai, Chien-Shu.) [3]

Indexed by:

SCIE

Abstract:

This paper incorporates more general cases with a new class of constantly adjusted concavity demand curves and includes three types of taxes. To verify the output symmetry under various forms of taxation, we simulate both linear and constant elasticity demand functions under the unit, demand ad valorem, and cost ad valorem taxes. If all the demand functions in the submarkets are linear, the total outputs are identical under both uniform pricing and third-degree price discrimination. Furthermore, if all the weak market demand curves are strictly "Robinson-concave" and all the strong market demand curves are strictly "Robinson-convex" or linear, then the total output under price discrimination exceeds that under uniform pricing, and vice versa. While different taxes lead to higher costs, the cost pass-through changes the prices of the products, and the change of total output still depends on the curvature of the demand curve. Therefore, the curvature of the demand curve remains the main determinant of changes in output. Our study provides a theoretical basis for market intervention in price discrimination.

Keyword:

cost ad valorem tax demand ad valorem tax Joan Robinson's output theorem third-degree price discrimination unit tax

Community:

  • [ 1 ] [Chen, Shih-Shen]Fuzhou Univ Int Studies & Trade, Sch Econ & Management, Fuzhou 350202, Peoples R China
  • [ 2 ] [Hung, Ken]Texas A&M Int Univ, AR Sanchez Sch Business, Laredo, TX 78041 USA
  • [ 3 ] [Tsai, Chien-Shu]Natl Kaohsiung Univ Sci & Technol, Dept Int Business, Kaohsiung 807618, Taiwan

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Source :

SYMMETRY-BASEL

ISSN: 2073-8994

Year: 2022

Issue: 5

Volume: 14

2 . 7

JCR@2022

2 . 2 0 0

JCR@2023

ESI Discipline: MULTIDISCIPLINARY;

ESI HC Threshold:117

JCR Journal Grade:2

CAS Journal Grade:4

Cited Count:

WoS CC Cited Count: 0

SCOPUS Cited Count:

ESI Highly Cited Papers on the List: 0 Unfold All

WanFang Cited Count:

Chinese Cited Count:

30 Days PV: 0

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