Production decision with carbon taxes and green-tech in a duopoly market

Based on the background of the world´s low-carbon economy development, this paper takes two manufacturers in a duopoly market as our target objects, and studies the production decision after low-carbon regulations in a duopoly market, besides we establish revenue functions after taking green-tech input into consideration under none carbon emissions limit and carbon tax policy, thus getting manufacturers´ optimal decisions. Through analysis above all, we find that manufacturers´ optimal production decisions will be affected by the carbon tax policy, as a result, manufacturers should cooperate with each other and avoid the impact of carbon tax policy on profits as far as possible through centralized decision making in a duopoly market. Although green-tech input increases the manufacturer´s cost, it improves products´ green level and reduces the carbon emissions thus achieving the government´s goal of developing low-carbon economy.