The marginal tax rate would equal the average tax rate for firms with earnings less than $50,000.

Question

Quizplus · Accepted Answer

This is true because the marginal tax rate is the rate at which the last dollar of earnings is taxed, while the average tax rate is the total tax paid divided by total earnings. For firms with earnings less than $50,000, the marginal tax rate will be the same as the average tax rate because the tax rate is a flat percentage for that income bracket.

The Marginal Tax Rate Would Equal the Average Tax Rate