Question

Firms are willing and able to sell 100 guitars per day at a price of $250 per guitar. What price will firms require to sell 100 guitars per day if there is a tax of $15 per guitar?

Answer 1

Answer:

The correct answer is $ 265.

Explanation:

The gross price at which the product is required to be sold is the price  inclusive of all taxes charge on behalf of the Government (sales tax, federal excise duty etc).

So the sale price in the case given in the question will be sum of 250 dollars and 15 dollars that is 265$.

Please note that income tax in not included in price of the product.