Volume 1, No. 3, December 2002 Back Competition between Nonprofit and For-Profit Firms Donald Lien Department of Economics, University of Texas at San Antonio, U.S.A. Abstract This paper considers a nonprofit firm competing against a for-profit firm in a homogenous goods market. Given a stochastic demand function and an asymmetric tax schedule, we derive Cournot-Nash equilibrium allowing the nonprofit firm to have an altruistic preference toward consumer surplus or total surplus. The effects of the tax rate and the degree of altruistic preference on market equilibrium outcomes are analyzed thereof. Key words: nonprofit; asymmetric taxation; stochastic demand; Cournot-Nash equilibrium JEL classification: L2; L3 Back