On Joan Robinson’s Output Symmetry Theorems with Various Taxations under Third-Degree Price Discrimination: A Generalization
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 valo...
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| Format: | Article |
| Language: | English |
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MDPI AG
2022-05-01
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| Series: | Symmetry |
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| Online Access: | https://www.mdpi.com/2073-8994/14/5/959 |
| _version_ | 1797495116718407680 |
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| author | Shih-Shen Chen Ken Hung Chien-Shu Tsai |
| author_facet | Shih-Shen Chen Ken Hung Chien-Shu Tsai |
| author_sort | Shih-Shen Chen |
| collection | DOAJ |
| description | 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. |
| first_indexed | 2024-03-10T01:43:51Z |
| format | Article |
| id | doaj.art-0706fae928d24d89840815729589817f |
| institution | Directory Open Access Journal |
| issn | 2073-8994 |
| language | English |
| last_indexed | 2024-03-10T01:43:51Z |
| publishDate | 2022-05-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Symmetry |
| spelling | doaj.art-0706fae928d24d89840815729589817f2023-11-23T13:18:56ZengMDPI AGSymmetry2073-89942022-05-0114595910.3390/sym14050959On Joan Robinson’s Output Symmetry Theorems with Various Taxations under Third-Degree Price Discrimination: A GeneralizationShih-Shen Chen0Ken Hung1Chien-Shu Tsai2School of Economics and Management, Fuzhou University of International Studies and Trade, Fuzhou 350202, ChinaA.R. Sanchez School of Business, Texas A & M International University, Laredo, TX 78041, USADepartment of International Business, National Kaohsiung University of Science and Technology, Kaohsiung 807618, TaiwanThis 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.https://www.mdpi.com/2073-8994/14/5/959third-degree price discriminationJoan Robinson’s output theoremunit taxdemand ad valorem taxcost ad valorem tax |
| spellingShingle | Shih-Shen Chen Ken Hung Chien-Shu Tsai On Joan Robinson’s Output Symmetry Theorems with Various Taxations under Third-Degree Price Discrimination: A Generalization Symmetry third-degree price discrimination Joan Robinson’s output theorem unit tax demand ad valorem tax cost ad valorem tax |
| title | On Joan Robinson’s Output Symmetry Theorems with Various Taxations under Third-Degree Price Discrimination: A Generalization |
| title_full | On Joan Robinson’s Output Symmetry Theorems with Various Taxations under Third-Degree Price Discrimination: A Generalization |
| title_fullStr | On Joan Robinson’s Output Symmetry Theorems with Various Taxations under Third-Degree Price Discrimination: A Generalization |
| title_full_unstemmed | On Joan Robinson’s Output Symmetry Theorems with Various Taxations under Third-Degree Price Discrimination: A Generalization |
| title_short | On Joan Robinson’s Output Symmetry Theorems with Various Taxations under Third-Degree Price Discrimination: A Generalization |
| title_sort | on joan robinson s output symmetry theorems with various taxations under third degree price discrimination a generalization |
| topic | third-degree price discrimination Joan Robinson’s output theorem unit tax demand ad valorem tax cost ad valorem tax |
| url | https://www.mdpi.com/2073-8994/14/5/959 |
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