Economics 9708 · AS & A Level · Maximum and minimum prices

Maximum and minimum prices — practice question

The diagram illustrates the income tax system used by a country. What are the average and marginal rates of tax as incomes increase from Y1 towards Y2?

  • Aaverage rate of tax: constant; marginal rate of tax: constant
  • Baverage rate of tax: constant; marginal rate of tax: decreasing
  • Caverage rate of tax: decreasing; marginal rate of tax: constant
  • Daverage rate of tax: decreasing; marginal rate of tax: decreasing

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