Concept: The question tests on basics of of Percentage
Solution:
Let the Original price = x
After an increase of 7%, the new price is 1.07x
After increasing by $40, the final price is 1.07x + 40... (1)
Also this final price is 15% greater than the original price = 1.15x .. (2)
Equating (1) and (2)
1.07x + 40 = 1.15x
.08x = 40
x = 4000/8 = $500
Option B