Question

Suppose the pre-tax price of gasoline is $1/gallon. An imposed tax of $0.50/gallon is paid by producers to the government, increasing the price of gasoline to $1.30/gallon. The gross price after the tax is _____; the after-tax price is _____.

Answer 1

gross price $1.50

after tax price = $1.30

Step-by-step explanation:

given data:

pre tax price = $1/gallon.

tax paid by the producer = $0.50/gallon

price of gasoline = $1.30/gallon.

Solution:

The gross price after the tax.

this is usually the price containing the total cost accrued.

= $1/gallon. + $0.50/gallon

= $1.50

the after-tax price is.

$1.30/gallon.