7.To control the use of tobacco, the federal government can impose many different types of tax on the producers of tobacco. Assume that there is only one producer (monopolist) who faces the demand curve P = 56 - 8Q, and whose total cost curve is C = 6Q^2 - 10.If the producer is a profit maximizer:

1.Assume now the government levies a per-unit tax of t on the producer in order to reduce the use of tobacco.What effect does this have on the profit-maximizing price and output?

2.Alternatively, assume the government levies a sales tax of 50% on the producer.What effect does this have on the profit-maximizing price and output?

3.If the per unit tax is set at 7, and the sales tax is set at 50%, which tax is more effective?