Suppose the state legislature in your state imposes a state licensing fee of $100 per year to be paid by all firms that file state tax revenue reports. This new business tax:
A) increases marginal cost.
B) decreases marginal cost.
C) increases marginal revenue.
D) decreases marginal revenue.
E) none of the above

Question

Quizplus · Accepted Answer

The $100 fee is a fixed cost, not related to the production level or sales of a firm, so it does not affect marginal cost or marginal revenue, which are concerned with the cost and revenue of producing one more unit of a good or service.

Suppose the State Legislature in Your State Imposes a State