All of the Following Are True About a Service Charge,EXCEPT

question 18

Multiple Choice

All of the following are true about a service charge,EXCEPT:

• A)it is considered part of the restaurant's gross revenue.
• B)restaurants pay income tax on it.
• C)it is a predetermined amount added to the customer's check.
• D)it is considered a tip.

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Definitions:

Immediate Market Period

A very short time frame in economics during which the supply of a good is completely fixed and cannot respond to changes in demand.

Supply

The total amount of a product or service that is available to consumers, which can vary based on price, production costs, and other factors.

Elastic

A term used in economics to describe the sensitivity of the demand or supply of a good or service to changes in its price.

Perfectly Inelastic

A situation in which the quantity demanded or supplied does not change regardless of any change in price.