Question: This year, State A raised revenues by increasing its general sales tax rate from 5 to 6 percent. Because of the increase , the volume

This year, State A raised revenues by increasing its general sales tax rate from 5 to 6 percent. Because of the increase , the volume of taxable sales declined from $800 million to $710 million. In contrast, State Z raised revenues from it's 5 percent sales tax by expanding the tax base to include certain retail services. The volume of services subject to tax was $5o million.

a) Compute the additional revenue raised by State A.

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