A IMPORTÂNCIA DA CURVA DA DEMANDA E O COMPORTAMENTO DO SETOR PARA UMA POLÍTICA DE DETERMINAÇÃO DE PREÇOS: O CASO DO ÁLCOOL HIDRATADO NO BRASIL

Abstract

The objectives of this paper is to estimate a demand function for the alcohol fuel in Brazil and to learn the behavior of this sector during the periodo of 1980-1995. The importance of demand curve is related to the fact that pollution taxes or subsidies imposed by government will have diferent effect over consumption depending upon the demand’s curve type. The importance of learning the behavior of the sector is related to the reaction curve to diferent policy to be implemented by policy maker involving this sector. The results obtanied were the followings: a) the best adjustment was obtained by a linear demand curve, therefore a pollution tax would have only half of it transferred to final price, the same would happen to any subsidy; b) altough this sector is characterized as a oligopoly its behavior is equivalent to a monopoly under price control where the main objective is to eliminate any probability of price control.