Subject: Keep the voters safe] Senator Jim Carey has contracted our services to analyze the impact of a $0.30 per trip increase in the toll bridge tax imposed on all toll bridges in his jurisdiction to increase government revenues to provide funds for intrasn'ucture improvements. The current toll bridge tart is $0.50 and according to the proposal the $0.30 tax increase will raise the price of tolls by $0.30 per nip above the private toll bridge operator's rate and increase local government revenues by $15,000 per month (because 50,000 trips are sold currently]. A preliminary analysis of our research team has indicated current monthly demand and supply in the local market due to alternative routes is Qd = 300,000 50,000P and Q5 = 25,000P F5,000 {note that this already includes the $0.50 tax}. This means the average price at a toll booth is $5.00 per hip and 50,000 trips are sold each month, which generates approximately $25,000 in consumer surplus, $50,000 in producer surplus, and $25,000 in state tax revenues. The Senator is concerned about the welfare of his constituents and their families, but also sees this tax increase as a way to boost government revenue. I would like you to calculate whether the calculations in the proposal are correct and how consumer and producer surplus will change after the tax increase will take effect. Depending on the changes in surplus and government revenues, Senator Carey will decide to support or oppose the tax, so your analysis is crucial in this campaign year