The Tax Rate That Specifically Applies to Each New Dollar

question 5

Multiple Choice

The tax rate that specifically applies to each new dollar of income is the:

• A)marginal tax rate.
• B)average tax rate.
• C)short-term capital gains tax rate.
• D)long-term capital gains tax rate.

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Definitions:

Profit-Maximizing

A firm's objective of adjusting outputs and pricing to achieve the highest possible profit.

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing to buy at each price point.

Total Cost

Represents the complete cost of production, including both fixed and variable costs, for producing a certain amount of goods or services.

Elastic

Describes a situation in which the supply or demand for a good or service is highly responsive to changes in price.