Marginal cost is the cost of producing an extra unit and is a function of variable cost.
In this case, increase in property tax results into reduced output. If the production output is within the present capacity of the fixed assets (property - land, factory, machines), property tax will be considered a fixed asset.
Hence there will be NO changes in the marginal cost.
May 5th, 2015
Studypool's Notebank makes it easy to buy and sell old notes, study guides, reviews, etc.