The correct answer is D.
The Laffer Curve represents the relationship between the tax rate and the total tax revenues collected by the economic authorities. It illustrates the incidence of the taxable income elasticity, the sensitiveness of the income earned by the economic agents on which the tax is applied, to variations in the tax rate.
<em>A laffer curve is represented in the graph attached.</em> Tax collection is 0 for 0% and 100% rates. Between these two values, the function will have an increasing section, a maximum and a decreasing section. Its maximum consitutes the tax rate that maximizes the total tax collection.
