Essay
Consider a firm that uses only one fixed input and one variable input.
a. Explain how this firm's ATC, AVC, and AFC curves will be affected by a government tax on the fixed input.
b. Explain how this firm's ATC, AVC, and AFC curves will be affected by a government tax on the variable input.
c. When would a tax on an input cause the MC curve to change?
Correct Answer:
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a. The AFC and ATC curves shift upward. ...View Answer
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Correct Answer:
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