Simulating Tariffs vs Quotas with Domestic Monopoly

Document Type

Article

Journal/Book Title/Conference

B.E. Journal of Industrial Organization Education

Volume

2

Publication Date

2007

Abstract

The pro-competitive effects of international trade in the presence of monopoly, and the deleterious effects of protection, are topics commonly taught in both international trade and industrial organization classes. We present a numerical simulation model for classroom use, built in Excel, that is designed to explore the effect of international trade on a monopoly, and how the effects of protecting the monopoly may differ depending on whether a tariff or a quota is chosen. We describe the model, key results, and how to integrate the approach into the curriculum.

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