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Suppose consumers buy 50 million packs of cigarettes per month at a price of $5 per pack. If a $1 tax is added to that price, By what percentage does the price change
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Suppose consumers buy 50 million packs of cigarettes per month at a price of $5 per pack. If a $1 tax is added to that

price, By what percentage does the price change

User Terrence Brannon
by
3.5k points

1 Answer

10 votes

Answer:

Percentage change= 20%

Step-by-step explanation:

Giving the following information:

Selling price before tax= $5

Tax= $1

Selling price after tax= $6

To calculate the percentage increase, we need to use the following formula:

Percentage change= [(Selling price after tax - Selling price before tax)/Selling price before tax]*100

Percentage change= [(6 - 5)/5]*100

Percentage change= 20%

User David Hansen
by
3.4k points
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