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R 8 . 6 . Suppose the government wishes to support newsprint providers and discourage the purchase of the apps produced by the digital news

R8.6. Suppose the government wishes to support newsprint providers and discourage the purchase of the apps produced by the digital news provider in the previous example. It imposes a tax of £60 per app produced, so that the new total cost relationship is TC=50Q+10,000+60Q=110Q+10,000 . (a) How does this affect profit-maximising output and price? (b) What is the new maximum profit? (c) What proportion of the tax is passed on to the consumer?

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