-In the above figure, if the tax rate is increased from 20 percent to 30 percent, tax revenue
A) decreases.
B) is constant.
C) increases.
D) may increase or decrease.

Question

-In the above figure, if the tax rate is increased from 20 percent to 30 percent, tax revenue
A) decreases. 
B) is constant. 
C) increases. 
D) may increase or decrease.

Quizplus · Accepted Answer

Increasing the tax rate from 20 percent to 30 percent generally leads to an increase in tax revenue, assuming the increase does not significantly deter the taxable activity or reduce the tax base by a greater proportion.

-In the Above Figure, If the Tax Rate Is Increased