Reference no: EM132471877

World famous Burpee Beer is brewed in the small town of west Burpee. Currently,the town of west Burpee levies a 2$ per-case tax on all Burpee beer, and the brewery sells 20,000 cases a year at a total price of $20 per case. The mayor of West Burpee has decided to erect a statue of himself in the town square at a cost of 20,000$, and wants to raise the money from additional tax revenue from sales of burpee beer. He has asked each of the three town council members to come up with a plan to raise the additional $20,000, and their plans are follows: Council member Simpson advises to increasing the per-case tax by $1,council member Milhouse advises raising the tax by $2 per case, and the council members Flanders advises reducing the current tax by $0.50 per case. For each of the three council member's plans,determine the following:

1) How many total cases of beer would need to be produced to increase tax revenue by exactly $20,000?

2) What is the price elasticity of demand for Burpee beer if the tax revenue increases by exactly $20,000?

3) How much total revenue will burpee beer receive if the tax revenue increases by exactly $20,000?