Tuesday, November 26, 2024

The optimal Tax rate for the Very Rich is Zero

The optimal tax rate for those who spend a small percentage of their income and invest the rest, like many billionaires, is 0.

Pigovian, LVT and progressive consumption taxes would be better than income and corporate taxes

Monopoly Pricing

People seem to assume that a monopoly's optimal price is much higher than it is. A monopoly business optimally prices where marginal revenue = marginal cost which is way below were people seem to imagine.

(BTW IMHO Governments can and do sometimes price much above that, they have less motivation to maximize goods and services or profits.)

Even an unregulated electric utility would probably not price much higher than they do with regulation and also since almost all monopoly utilities are regulated it is hard to know what the price should/would be.

Monday, November 25, 2024

Monopoly Pricing

People seem to assume that a monopoly's optimal price is much higher than it is. A monopoly business optimally prices where marginal revenue = marginal cost which is way below were people seem to imagine.

Even an unregulated utility would probably not price much higher than they do with regulation and also since almost all monopoly utilities are regulated it is hard to know what the price should/would be.

(BTW IMHO Governments can and do sometimes price much above that because that have less motivation to maximize utility or profits.)