Question: A government imposes a tax of $2 on a product that costs $10. What is the new price of the product if the tax is fully passed on to consumers?
Options:
$10
$12
$14
$8
Correct Answer: $12
Solution:
New price = Original price + Tax = 10 + 2 = $12
A government imposes a tax of $2 on a product that costs $10. What is the new pr
Practice Questions
Q1
A government imposes a tax of $2 on a product that costs $10. What is the new price of the product if the tax is fully passed on to consumers?
$10
$12
$14
$8
Questions & Step-by-Step Solutions
A government imposes a tax of $2 on a product that costs $10. What is the new price of the product if the tax is fully passed on to consumers?
Step 1: Identify the original price of the product, which is $10.
Step 2: Identify the amount of tax imposed on the product, which is $2.
Step 3: Calculate the new price by adding the original price and the tax together.
