A consumer values a car at $525,000 and a producer values the same car at $485,000.If sales tax is 8% and is levied on the seller,then the sellers bottom line price is

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Since the producer values the car at $485,000, this is the price at which the seller would buy the car. With an 8% sales tax, the seller would have to pay an additional 8% of $485,000, which is $38,800. Thus, the seller's bottom line price would be $485,000 + $38,800 = $523,800.

A Consumer Values a Car at $525,000 and a Producer