5.3+Notes+and+Test+Questions

=A rise in the cost of an input will cause a fall in supply at all price levels.= =If a firm has no control over the price, the only solution is to cut production and lower marginal cost until marginal costs equals the lower price.= =A subsidy is a government payment that supports a business or market.= =Government also pays producers.= =A government can reduce the supply of some goods by placing an excise tax on them.= =Sometimes used to discourage the sale of harmful goods.= =Regulation is government intervention in a market that affects the price, quantity, or quality of a good.= =Number of suppliers, future prices influence supply.= =3 TEST QUESTIONS= =1. What are the factors that affect supply?= =2. What is an excise tax?= =3. What does government intervene in?=