Suppose that the government charges a firm a franchise tax each year (instead of only once). Describe the effect of this tax on the marginal cost, average variable cost, short-
run average cost, and long-run average cost curves. (Assume that the firm's before-tax average cost curve, $AC_{BT}$, is U-shaped.)
The annual franchise tax
▼ the firm's marginal cost curve,
cost curve, and
▼ the long-run average cost curve.
▼ the firm's average variable cost curve,
▼ the short-run average