During 2014 and 2015,Danny Pays Property Taxes of $3,500 Each

question 20

Multiple Choice

During 2014 and 2015,Danny pays property taxes of $3,500 each year on a piece of land.During 2014,the land is vacant and unproductive.In 2015,Danny uses the land as a parking lot and generates $16,000 in income.Which of the following is true regarding the property taxes?

• A)Capitalize $3,500 each year.
• B)Deduct $3,500 each year.
• C)Capitalize $3,500 in 2014 and deduct $3,500 in 2015.
• D)Either B or C is acceptable.

---

Definitions:

Entry Fee

An initial charge required to gain access to a service, event, or establishment.

Tying

Practice of requiring a customer to purchase one good in order to purchase another.

Price Discrimination

The strategy of selling the same product at different prices to different groups of buyers, often based on their willingness to pay.

Market Power

The ability of a company or entity to influence the price and production levels in a market.