You are a member of Board who chairs an ad committee of reforming taxes on telecommunication services. The local telecom tax es can amount to as much as 25 percent of a consumer’s phone bill. The high 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 Q=250-5P and the market supply (including taxes) is Q=4P+110 (both in million). The Board of management is considering tax reform that would dramatically cut tax rates, leading to the supply function under the new tax policy of Q=4.171P+110. How much money would typical consumer save each month as a result of proposed legislation?

You are a member of Board who chairs an ad committee of reforming taxes on
telecommunication services. The local telecom tax es can amount to as
much as 25 percent of a consumer’s phone bill. The high 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 Q=250-5P and the market supply (including taxes)
is Q=4P+110 (both in million). The Board of management is considering
tax reform that would dramatically cut tax rates, leading to the
supply function under the new tax policy of Q=4.171P+110. How much
money would typical consumer save each month as a result of proposed
legislation?