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Aaron Found a Prototype of a New Pair of Glasses

question 9

Essay

Aaron found a prototype of a new pair of glasses with Internet service and other computing capabilities while in a bar one evening. He offered the prototype to the owner of a magazine and blog that reviews new digital devices. The owner paid Aaron $10,000 in return for the prototype. What tax issues should Aaron consider?


Definitions:

Marginal Cost

The increase in total cost that arises from producing one additional unit of output.

Competitive Market

A market structure characterized by a large number of buyers and sellers, such that no single participant can significantly influence price.

Marginal Cost

The increase in cost that arises from producing an additional unit of output.

Market Demand

The total quantity of a good or service that all consumers in a market are willing and able to buy at various prices.

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