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VIF Mortis Est: A Rejoinder to Singer

S. Fred Singer claims that my first three cases (in which there are no foreign demanders) are hardly realistic because price discrimination is impossible. Singer is correct about the realism of these cases: foreign demanders, after all, do exist. Nevertheless these cases are important for understanding the impact of a variable import fee. The bottom line-which Singer does not apparently dispute - is that if foreign oil producers have some degree of monopoly power, then a VIF will raise not only the price paid by domestic consumers but also the price charged by foreign producers.

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Energy Specializations: Energy and the Economy – Energy as a Productive Input; Energy and the Economy –Economic Growth and Energy Demand; Energy and the Economy – Resource Endowments and Economic Performance; Energy and the Economy – Energy Shocks and Business Cycles

JEL Codes: D42: Market Structure, Pricing, and Design: Monopoly, Q41: Energy: Demand and Supply; Prices, Q40: Energy: General, L11: Production, Pricing, and Market Structure; Size Distribution of Firms, L13: Oligopoly and Other Imperfect Markets, Q35: Hydrocarbon Resources, D43: Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection

Keywords: Variable oil import fee, US, Energy policy

DOI: 10.5547/ISSN0195-6574-EJ-Vol10-No4-12

Published in Volume 10, Number 4 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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