Assume a Firm Increases Its Revenue by $100 While Increasing

question 90

Multiple Choice

Assume a firm increases its revenue by $100 while increasing its cost of goods sold by $85.How much additional tax will the firm owe if its marginal tax rate is 25%?

• A) $3.75
• B) $7.50
• C) $13.75
• D) $25.00

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Definitions:

Usage Tax

A tax imposed on the use of goods or services, typically applied to regulate or discourage certain behaviors.

Average Number

A statistical measure representing the sum of values divided by the count of those values.

Usage Tax

is a tax imposed on the use or consumption of certain goods and services, different from a sales tax which is collected at the time of sale.

Difference-In-Differences

A statistical technique used in econometrics and quantitative research to determine the effect of a specific intervention or treatment by comparing the before-and-after differences in outcomes between a control group and a treatment group.