Tax Revenue Equation Macroeconomics

And two is to reduce spending.

Tax revenue equation macroeconomics. Determinants of price elasticity and the total revenue rule our mission is to provide a free world class education to anyone anywhere. Add each tax payment made during the legally defined tax collection period to arrive at total tax revenue. If the monopoly pays an ad valorem tax at rate t then the marginal revenue decreases by tmr q. Aspecifictaxτwill reduce the marginal revenue by τ 1 fix a quantity q.

The total price gained by a given source is revenue. A sample sales revenue calculation. Total revenue price x quantity tr p q output p tr q output. However for the government it s very tricky.

Formula chart ap microeconomics unit 2 supply and demand total revenue price x quantity total revenue test p. It is the total income of a business and is calculated by multiplying the quantity of. For service based companies the formula is revenue number of customers x average price of services. Assume the tax parameters t and τhave been chosen so as to collect the same amount of tax revenues at production level q.

Khan academy is a 501 c 3 nonprofit organization. One is by increasing the amount of revenue. If the government increases tax too much it would affect economic growth. The linear growth rate of tax revenue lgr y from the above equation will be estimated as follows.

If the analysis is done on the micro economic level then the economic formula is determined as the difference of total revenues generated by business and the cost incurred to generate the revenue. Sales revenue 1 000 x 350 350 000. However when an analysis is performed at the macroeconomic level then the economic formula is derived by the means of gross domestic product. The two significant ways to increase revenue for the government is to increase the tax percentage and to ensure economic growth.

Tax revenue price w tax price seller receives x quantity unit 3 production markets revenue. For instance in 2013 the state of new jersey collected a total of 8 235 billion in sales and use tax revenues which was approximately 30 5 percent of the 27 billion the state government collected from all taxes and fees for the same period. 1 y 100 b 1 y 100. Total revenue in economics refers to the total receipts from sales of a given quantity of goods or services.

Revenue should be reported to the government periodically so that the government could know the total income of the country and collect the taxes. Lgr y marginal tax revenue function total tax revenue function 100 dy dt y 1 dy dt. Why the sales. Then tqp q τq or τ tp q.

Last year we sold 1 000 game consoles for 350 per piece.