g If the government places a $2 tax on each unit of good X that is produced by Firm A, it follows that the tax will not affect cost, but will affect cost.

*fixed( variable and average fixed)average variable

Explanation:

If the government places a $2 tax on each unit of good X that is produced by Firm A, it follows that the tax will not affect variable and average fixed cost, but will affect average variable cost.

From the question, We are informed about if government places a $2 tax on each unit of good X that is produced by Firm A. In this case it follows that the tax will not affect variable cost, but will affect average variable cost. Fixed cost in finance can be regarded as expenses that doesn't change irrespective of the production output i.e it doesn't depends on the actual level of goods/service been produced by the organization. These could be insurance, as well as salaries, property taxes and so on. average variable cost can be regarded as the ratio of the variable cost and the produced output., Where variable cost are those associated with level bof output.

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