Answer: D

Call the purchase price p. In State X, tax is equal to 0.1(p - 100). That's ten percent (0.1) of $100 less than the purchase price. In State Y, tax is 0.08p. Since we're looking for the price at which the sales tax will be equal, we can use the same variable for the purchase price in both states.

Since we want the sales tax to be equal, we can set these two expressions equal to each other:
0.1(p - 100) = 0.08p
0.1p - 10 = 0.08p
0.02p = 10
2p = 1000
p = 500, choice (D).