Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 22

Taxes can obviously affect firms' costs. Explain how each of the following taxes would affect total, average, and marginal cost. Be sure to consider whether the tax would have a different effect depending on whether one discusses short-run or long-run costs:
a. A franchise tax of $10,000 that the firm must pay in order to operate
b. An output tax of $2 on each unit of output
c. An employment tax on each worker s wages
d. A capital use tax on each machine the firm uses