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?

Question

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?

Quizplus · Accepted Answer

The Answer of 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?

Consider a Firm That Uses Only One Fixed Input and One