Suppose the state legislature in your state imposes a state licensing fee of $100 per year to be paid by all firms that file state tax revenue reports. This new business tax:

A) increases marginal cost.
B) decreases marginal cost.
C) increases marginal revenue.
D) decreases marginal revenue.
E) none of the above

State Licensing Fee

A mandatory charge paid to a state government for the issuance of a license to conduct a particular business or profession within that state's jurisdiction.

Marginal Cost

The escalation in aggregate cost stemming from the production of one more unit of a good or service.

Business Tax

Taxes imposed on the income or profit of businesses, varies by country and the type of business.