Abstract
The effect on national welfare of technical progress in different sectors are investigated in the presence of monopoly. Technical progress in the monopoly sector always benefits a country even if it increases the markup rate of the monopolist and enlarges the monopoly sector. Technical progress in a competitive sector can be less beneficial than that in the monopoly sector. It can even reduce welfare though it lowers the markup rate of the monopolist. Welfare implications of production subsidies and tariffs are also examined in this context.
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