Title

COMPARATIVE STATICS OF A MONOPOLISTIC FIRM FACING RATE-OF-RETURN AND COMMAND-AND-CONTROL POLLUTION CONSTRAINTS

Authors

Authors

M. R. Caputo;D. Popov

Comments

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Abbreviated Journal Title

Bull Econ. Res.

Keywords

Averch-Johnson; command-and-control regulations; comparative statics; Economics

Abstract

The intrinsic comparative statics properties of a general rate-of-return regulated, profit-maximizing model of a monopolist facing a command-and-control pollution constraint are derived. Recent advances in the theory of comparative statics are used to derive the basic comparative statics of the model, which are contained in an observable negative semi-definite matrix and possess the form of Slutsky-like expressions. We consider several command-and-control pollution constraints that are commonly implemented in practice, and conclude that the intrinsic comparative statics properties of the model are qualitatively invariant to the type of command-and-control pollution constraint imposed. We compare our results with those extant, and find that several basic results from the standard A-J model no longer hold in our model.

Journal Title

Bulletin of Economic Research

Volume

66

Publication Date

1-1-2014

Document Type

Article

Language

English

First Page

S17

Last Page

S35

WOS Identifier

WOS:000348550700002

ISSN

0307-3378

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