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

Exercise 27

Explain whether each of the following actions would affect the firm s profit-maximizing decision. (Hint: How would each affect MR and MC?)a. An increase in the cost of a variable input such as labor
b. A decline in the output price for a price-taking firm
c. Institution of a small fixed fee to be paid to the government for the right of doing business
d. Institution of a 50 percent tax on the firm's economic profits
e. Institution of a per-unit tax on each unit the firm produces
f. Receipt of a no-strings-attached grant from the government
g. Receipt of a subsidy per unit of output from the government
h. Receipt of a subsidy per worker hired from the government