Abstract
This chapter provides a graphical explanation of a mixed oligopoly model in which private firms maximize their own profits and a public firm maximizes the sum of both the consumer and producer surpluses. In every period, the marginal revenue curve and the after-tax marginal cost curve play important roles in describing the behavior of the private firm. Furthermore, the marginal social benefit curve and the after-tax marginal cost curve contribute to the behavior of the public firm. Both firms react against the supply of other firms in turn in an adjustment process. Finally, the economy reaches equilibrium.
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Notes
- 1.
The behavior in the \( {0}^{\mathrm{th}} \) turn is defined as the behavior of the public firm in the \( {0}^{\mathrm{th}} \) period.
- 2.
The marginal social benefit curve in the \( {0}^{\mathrm{th}} \) period is equivalent to the inverse demand function.
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Okuyama, S. (2017). Equilibrium and the Adjustment Process in a Mixed Oligopoly: A Graphical Explanation. In: Yanagihara, M., Kunizaki, M. (eds) The Theory of Mixed Oligopoly. New Frontiers in Regional Science: Asian Perspectives, vol 14. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55633-6_2
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DOI: https://doi.org/10.1007/978-4-431-55633-6_2
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