monopolists may be intertemporal optimizers. they may leave some money on the table short-term, because they believe it confers longer-term advantages. 1/

if you are apple, you want people deep in your ecosystem, and you may be willing to tolerate a bit of redirectable consumer surplus in order to encourage that. 2/

now comes a tax in one country. if you pass it through in just that country, it hits that surplus only there. but maybe it hurts uptake into your ecosystem and brand satisfaction there. you can of course partially eat the tax, but you don’t like the hit to profits. 3/

alternatively you can reoptimize that tradeoff between longer term uptake concerns and immediate pricing concerns globally. 4/

you pull back a little bit on the immediate-term unnecessary surplus you had previously offered globally, take a hit on expected future uptake globally, to reduce the hit in the important country now imposing the tax with minimal impact to profits. 5/

not every monopolist is maximally immediate term ruthless. the point of being a price maker rather than a price taker is you have choices. 6/

if your understanding of market power is it is always exploited like an Econ 101 textbook in which the only relevant dimensions are price and quantity, you will miss the real diversity and unpredictability that comes with having the power to choose. /fin