SPATIAL PRICING POLICY AND THE HENRY GEORGE THEOREM IN AN OPTIMALLY SIZED MARKET WITH LAND RENTS

In a spatial market in which there is a functioning land market and in which market size is set optimally, if a tax on differential land rents is used to finance an appropriately constructed subsidy to the monopolist, the market solution will replicate the planning solution. The planning solution sets a mill price at marginal production cost and the fixed costs of production will be just equal to differential land rents. © 1991.