Ernie's Earmuffs Produces 200 Earmuffs Per Year at a Total

question 173

Multiple Choice

Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. What is Ernie's total variable cost?

• A) $2,400
• B) $2,000
• C) $1,600
• D) $800

Recognize how the elasticity of demand influences the tax burden on consumers.

Assess viewpoints on the incidence of corporate income tax.

Differentiate between the concepts of efficiency loss of a tax and tax revenue.

Comprehend the regressive nature of sales taxes on consumer goods.

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security representing ownership in a corporation.

Market Price

The rate at which an asset or service is exchanged in a competitive marketplace.

Marginal Tax Rate

The tax rate incurred on an additional dollar of income, reflecting the rate applicable to the highest portion of an individual's or corporation's income.

Capital Structure

The mix of different forms of external financing a firm uses, such as debt, equity, and other securities, to fund its operations and growth.