How will the ATC be impacted since the property tax increase influences the overall cost of production on a per-unit basis?

The Average Total Cost (ATC) will be influenced by any decrease in property taxation. If property tax decreases, the Average Total Cost will lower the ATC curve down the slope. It is also worth noticing that lowered property tax does not affect the marginal cost (MC) but instead shifts the average fixed cost (AFC) curve down the slope, thus lowering the AFC.

Average Total Cost:

This is the ratio of the sum of fixed and variable costs and manufactured units. This is a useful tool in the manufacturing and marketing because below average total cost leads to a financial loss for the companies.