Assume a firm increases its revenue by $100 while increasing its cost of goods sold by $85.How much additional tax will the firm owe if its marginal tax rate is 25%?
A) $3.75
B) $7.50
C) $13.75
D) $25.00

Name: Assume a firm increases its revenue by $100 while increasing its cost of goods sold by $85.How much additional tax will the firm owe if its marginal tax rate is 25%? A) $3.75 B) $7.50 C) $13.75 D) $25.00
Brand: Quizplus
Rating: 4.8 (31 reviews)

Question

Quizplus · Accepted Answer

Increase in taxes = 0.25 × ($100 − 85) = $3.75

Assume a Firm Increases Its Revenue by $100 While Increasing