Suppose that the government of New York state promises to decrease taxes to a firm if it decides to stay in New York instead of moving to another state. This policy on the part of the state constitutes ________, to make the ________ of the firm remaining in New York.

Question

Quizplus · Accepted Answer

The policy acts as an incentive by offering a financial benefit (tax decrease) to encourage the firm to stay, aiming to make the marginal benefit of remaining in New York exceed the marginal cost for the firm.

Suppose That the Government of New York State Promises to Decrease