Define proposed legislation for the supply

Reference no: EM131444409

Question: You are an assistant to a senator who chairs an ad hoc committee on reforming taxes on telecommunication services. Your best estimates indicate that, based on current tax rates, the monthly market demand for telecommunication services is given by QD = 300 - 4P and the market supply is given by QS = -120 + 3P, where P is the monthly price of telecommunication services. The senator is considering tax reform that would dramatically cut tax rates, leading to a supply function under the new tax policy ofQS = -120 + 3.2P. How much money per unit (i.e. based on equilibrium price) would a typical consumer save each month as a result of the proposed legislation? Show calculations to support your answer.

Reference no: EM131444409

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