hich of the following accurately explains how profit is calculated?
September 12, 2020
a) Do you think that the auto companies should have been bailed out by the Federal Government? b) Should the big banks be allowed to fail?
September 12, 2020

You are assistant to a senator who chairs an as hoc committee on reforming taxes on telecommunication services. Based on your research, AT&T has spent over$15 million on related paperwork and compliance cost. Moreover, depending on the locale, telecom taxes can amount to as much as 25% 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 telecom industry has led to a highly competitive market. Your best estimeate indicates that, based on current tax rates, the monthly market demand for telecommunication services is given by Qd = 250 -5P and the market supply (including taxes) is Qs = 4P -110 (both in millions), where P is the montly price of telecommunication service. The senator is considering tax reform that would dramatically cut tax rates, leading to a supply function under the new tax policy of Qs =4.171P- 110. How much money would a typical consumer save each month as a result of the proposed legislation?

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