Consider a monopolist facing a demand curve
x = 110 - q
where q denotes the price. The marginal cost of production is constant at 10 dollars per unit. Suppose that the government needs to raise 450 dollars in revenue.
Consider the following three proposals:



Levy a speciÖc tax t per unit sold


Levy an ad-valorem tax equal to fraction  of the consumer price q


Levy a proÖt tax at rate s 1. Compute the tax rates the government needs to charge under each system
in order to raise the 450 dollars in revenue. [10 points]


2. Which taxation method is the "best" from the monopolistís point of view? Which taxation method is the best from the consumersípoint of view? [10 points]