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Author Question: Compare and contrast the tax base with the tax rate structure. What will be an ideal ... (Read 138 times)

moongchi

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Compare and contrast the tax base with the tax rate structure.
 
  What will be an ideal response?

Question 2

Explain what a perfectly contestable market means. Give an example of a perfectly contestable market. Explain why the outcome in a perfectly contestable market is that firms produce efficiently.
 
  What will be an ideal response?



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cupcake16

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Answer to Question 1

The base of a tax is the measure or value upon which the tax is levied. The rate structure of a tax determines the portion of the base that must be paid in tax.

Answer to Question 2

A perfectly contestable market is a market in which entry and exit are costless. An example of a perfectly contestable market is the market for trucking services. The firms are forced to behave efficiently because of the threat of competition.



moongchi

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cupcake16

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