Why will increasing new car tax and car licences have little effect on car use?

Question

Quizplus · Accepted Answer

Increasing new car tax and car licenses are examples of fixed costs because they are costs that do not change with the amount of car use. Since they are fixed, they do not affect the marginal cost of using a car, which is the cost of using the car for one more unit of time or distance. This means that after paying these fixed costs, the cost of additional car use does not increase, leading to little effect on the decision to use the car more or less.

Why Will Increasing New Car Tax and Car Licences Have