A few years ago, the Utah State Legislature, in response to…
A few years ago, the Utah State Legislature, in response to concerns about the market power of IHC (the firm that operates the Utah Valley Regional Medical Center in Provo, Utah, and other hospitals in Utah and Idaho), considered a bill to tax IHC’s transactions at the rate of 3 percent. This rate is below the 6.85 percent sales tax on other firms such as Harmons Grocery (a local grocery store in Provo, Utah), but above what was the tax rate of 0 percent for IHC’s transactions. Suppose that it is undisputed that IHC has market power. Then the tax ________.
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