Managerial Economics: Applications, Strategy and Tactics 12th Edition by James McGuigan, Charles Moyer, Frederick Harris

Exercise 6

In the context of the shareholder wealth-maximization model of a firm, what is the expected impact of each of the following events on the value of the firm Explain why.
a. New foreign competitors enter the market.
b. Strict pollution control requirements are enacted.
c. A previously nonunion workforce votes to unionize.
d. The rate of inflation increases substantially.
e. A major technological breakthrough is achieved by the firm, reducing its costs of production.