You are an assistant to a senator who chairs an ad học committee on reforming taxes on telecommunication services. Based on your research, AT&T has spent over $15 million on related paperwork and compliance costs. Moreover, depending on the locale, telecom taxes can amount to as much as 25 percent of a consumer's phone bill. These high tax rates on telecom services have become quite controversial, due to the fact that the deregulation of the telecom industry has led to a highly competitive market. Your best estimates indicate that, based on current tax rates, the monthly market demand for telecommunication services is given by Qª = 200 – 5P and the market supply (including taxes) is QS = 2P – 150 (both in millions), where P is the monthly price of the telecommunication services. The senator is considering tax reform that would dramatically cut tax rates, leading to a supply function under the new tax policy of QS = 2.4P – 150. How much money per unit would a typical consumer save each month as a result of the proposed legislation? Instruction: Enter your response rounded to the nearest penny (two decimal places). 2$

ENGR.ECONOMIC ANALYSIS
14th Edition
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Author:NEWNAN
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Chapter1: Making Economics Decisions
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You are an assistant to a senator who chairs an ad hoc committee on reforming taxes on telecommunication services. Based on your
research, AT&T has spent over $15 million on related paperwork and compliance costs. Moreover, depending on the locale, telecom
taxes can amount to as much as 25 percent of a consumer's phone bill. These high tax rates on telecom services have become quite
controversial, due to the fact that the deregulation of the telecom industry has led to a highly competitive market. Your best estimates
indicate that, based on current tax rates, the monthly market demand for telecommunication services is given by Qa = 200 – 5P and
the market supply (including taxes) is Q = 2P – 150 (both in millions), where P is the monthly price of the telecommunication services.
The senator is considering tax reform that would dramatically cut tax rates, leading to a supply function under the new tax policy of Q
= 2.4P – 150. How much money per unit would a typical consumer save each month as a result of the proposed legislation?
Instruction: Enter your response rounded to the nearest penny (two decimal places).
2$
Transcribed Image Text:You are an assistant to a senator who chairs an ad hoc committee on reforming taxes on telecommunication services. Based on your research, AT&T has spent over $15 million on related paperwork and compliance costs. Moreover, depending on the locale, telecom taxes can amount to as much as 25 percent of a consumer's phone bill. These high tax rates on telecom services have become quite controversial, due to the fact that the deregulation of the telecom industry has led to a highly competitive market. Your best estimates indicate that, based on current tax rates, the monthly market demand for telecommunication services is given by Qa = 200 – 5P and the market supply (including taxes) is Q = 2P – 150 (both in millions), where P is the monthly price of the telecommunication services. The senator is considering tax reform that would dramatically cut tax rates, leading to a supply function under the new tax policy of Q = 2.4P – 150. How much money per unit would a typical consumer save each month as a result of the proposed legislation? Instruction: Enter your response rounded to the nearest penny (two decimal places). 2$
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