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SURPRISE PRICE SHIFTS, TAX CHANGES AND THE SUPPLY BEHAVIOUR OF RESOURCE EXTRACTING FIRMS *
Author(s) -
LONG N. V.,
SINN HANSWERNER
Publication year - 1985
Publication title -
australian economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 15
eISSN - 1467-8454
pISSN - 0004-900X
DOI - 10.1111/j.1467-8454.1985.tb00116.x
Subject(s) - surprise , citation , economics , resource (disambiguation) , sociology , history , political science , law , computer science , computer network , communication
It is shown that a surprise increase in the current price (due to, say, a change in the tariff rate) may cause a resource firm to increase or decrease its current rate of extraction, depending on its expectation of future changes in the price. The key parameters are the rate of price change in the absence of the surprise shock, the rate of interest, and the rate of change of the tax rates. Copyright 1985 by Blackwell Publishers Ltd/University of Adelaide and Flinders University of South Australia