The Taxable Portion of a Gain from Qualified Small Business

question 15

Multiple Choice

The taxable portion of a gain from qualified small business stock is taxed at a top tax rate of

• A)15%.
• B)18%.
• C)20%.
• D)28%.

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Definitions:

Constant Cost Industry

An industry in which the costs of production do not change as the industry's output changes.

Natural Monopoly

A market situation in which the average costs of production continually decline with increased output. In a natural monopoly, the average costs of production will be lowest when a single, large firm produces the entire output demanded by the marketplace.

Perfectly Elastic

Perfectly elastic refers to a situation in economic theory where the quantity demanded or supplied of a good changes infinitely in response to any change in price.

Price-taker Industry

An industry in which companies have no control over the prices they charge because these prices are determined by the overall supply and demand in the market.