A NOTE ON TAXATION, INCREASING RETURNS DUE TO SET-UP COSTS AND COMPETITIVE EQUILIBRIUM,
YALE UNIV NEW HAVEN CONN COWLES FOUNDATION FOR RESEARCH IN ECONOMICS
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Given the following problem Suppose that a closed economy has all of the properties of convexity of preference sets and production sets except that in order to use certain production processes set-up costs must be paid. The set up costs cause increasing returns and destroy the competitive equilibrium is there a tax policy which restores the equilibrium and would it always be approved unanimously or by a majority vote. This problem is discussed in this report.
- Economics and Cost Analysis