Answer:
Additional tax the firm will owe: $3.15
Explanation:
Marginal tax rate is calculated by following formula:
Marginal tax rate = Change in taxes paid/Change in income
Change in taxes paid = Marginal tax rate x Change in income
The firm increases its revenue by $100 while increasing its cost of goods sold by $85.
Change in income = $100 - $85 = $15
Additional tax the firm will owe = $15 x 21% = $3.15
Answer:
$3.15
Explanation:
Marginal income is the difference between the marginal revenue and the marginal cost.
Marginal revenue = $100
Marginal cost = $85
Marginal taxable income = $100 - $85
=$15
If the marginal tax rate is 21%, additional tax owed
= 21% × $15
=$3.15
The marginal tax owed as a result of the increase in revenue and cost is $3.15.
