If a tax is imposed on the buyer of a product, the incidence of the tax will fall entirely on the buyer. If the equilibrium market price is above the price floor, the price floor is binding. When the price of a good or service falls the total consumer and total producer surplus decreases. An allocation of resources is efficient if consumer surplus is maximized. As the size of a tax declines the deadweight loss from the tax increases.
Interest paid on a bank loan is an implicit cost.
In the long run, if marginal cost is less than average total cost, average total cost is rising in the short-run. When price is below average variable cost, a firm in a competitive market will continue to operate as long as average revenue exceeds average variable costs. The new firms observe a signal to enter a competitive market when total revenue exceeds total fixed costs.