Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

Exercise 20

Good X is produced in a competitive market using input A. Explain what would happen to the supply of good X in each of the following situations:
a. The price of input A decreases.
b. An excise tax of $3 is imposed on good X.
c. An ad valorem tax of 7 percent is imposed on good X.
d. A technological change reduces the cost of producing additional units of good X.