The Laffer curve shows that

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The Laffer curve shows that as tax rates increase from low levels, tax revenue also increases. However, at some point, further increases in tax rates will lead to a decrease in tax revenue due to discouraging work, investment, and production activities. This point is known as the "revenue-maximizing rate," and it lies on the downward-sloping part of the Laffer curve. Therefore, choice D (at some specific tax rate, tax revenue is maximized) is the best answer.

The Laffer Curve Shows That