JOINT PRODUCTS AND RESPONSES TO A PROFIT TAX - THE CASE OF ENDOGENOUSCOST ALLOCATION

With a simple assumption of the cost function, an earlier article show s that on increase in profit tax will increase the joint production. T his note provides a complement to that study by considering the case i n which the method of endogenous cost allocation is appropriate. The p revious result still holds in our framework with some additional assum ptions on the demand function.