Abstract
We compare the effects of an emission tax, and those of a relative emission standard, on welfare and pollution levels under oligopolistic market structures. We consider the cases where the number of firms is fixed and where there is free entry and exit of firms. When the number of firms is fixed, (i) a relative emission standard is welfare-superior to an emission-equivalent emission tax, and (ii) an emission tax is emission-superior to a welfare-equivalent relative emission standard. Under free entry and exit, the results are just the opposite when the inverse demand function is concave.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
