Answer:
B) stiff fines are not the only way to collect past due corporate taxes
Explanation:
Collecting taxes is not an easy or inexpensive job. The IRS spends billions of dollars in order to collect taxes and the same applies to state taxing entities (at a smaller proportion).
So if state tax official can find a way to collect past due taxes then it should always be a good idea. Everyone loves a discount and corporations probably love discounts more. If the reduction or elimination of fines will make corporations pay their state taxes, then it's a great idea.
It's always better to collect $100 in taxes than to have $200 in past due taxes that aren't collected.
Answer:
The correct answer is option c.
Explanation:
The price of Kate's breakfast special is $5.
The average variable cost is $3.95.
The average fixed cost is $1.25.
The average total cost
= $3.95 + $1.25
= $5.20
The price is not covering the average total cost but it is covering the average variable cost. The firm can continue operating in the short run but stop production in the long run.