Any working member of the economy is all too familiar with income taxes - and what they do to our paychecks! Suppose for now that the single and married tax schedules are as follows (these are not the official IRS tables like the ones we worked with in class):

W Price ($) a 20,000 P (Pessimistic Expectations) b P (50-50 15,000 Expectations) D (Low cost) D ( High cost) 1 2 4 Quantity (Thousands of customers)