The effect of government regulation on a business firm's costs and prices: micro or macro?

Government policy impacts microeconomic effects if it alters market players' inputs, incentives, and economic decisions. The effects are often in the form of tariffs, tax policy, fiscal policy, regulation, subsidies, and legal tender laws. The costs and profits that individual players in the market gain are then manipulated by these policies, affecting their decision. Some impacts may be intentional, such as increasing tax for alcohol or cigarettes, but others may be unintentional. Government policy may be seen as an external factor; however, its effects affect the microeconomic environment.