Boss Hogg is CEO of a corporation in a perfectly competitive industry (with identical firms), with isoquants as depicted here. Prior to the drop in the corporate income tax, the industry was in long run equilibrium. Boss Hogg's firm was producing at production plan A, selling its out put at price p* and paying r* for capital and w* for labor. A decrease in the corporate income tax is, in this problem, equivalent to a reduction in the rental rate of capital. F D :M -----. k* a. At his annual Board of Directors meeting, Boss Hogg informs the Board that he anticipates the passage of corporate tax reform that will reduce the corporate income tax. He does not believe this will have any effect on any prices other than the rental rate of capital – and he informs the board that he has concluded switching to produc plan F will be the firm's profit maximizing strategy once the corporate income tax has been reduced. What must Boss Hogg believe happens to the marginal product of labor as capital is :E I' 1* l"

Q: An agricultural seed company has an inverse demand given by: P = 120 - 2Q, and a cost function given…

A: Note : In case of multiple questions , we answer only the first question.  The answer to your first…

Q: definition of products, goods and services

A: TO understand the definition of these terms, we need to understand that goods and products are used…

Q: the quantity of a good or service which consumers want and have the ability to purchase

A: Quantity- It is the number or amount of goods or services.

Q: Why are families so important to the American economy?

A: Rising monetary disparity in the United States and all over the planet is broadly considered a…

Q: how do you write an audit of how you nonverbally communicate?

A: Title: Audit of Nonverbal Communication SkillsIntroduction:This audit aims to evaluate and assess…

Q: A pharmaceutical corporation has developed a unique new drug, making the company a monopoly. Demand…

A: For a monopoly, profit maximization occurs at the point where MR equals MC

Q: What are the Annual benefits?

A: The investments are very important factors for the economic growth and development. This is because…

Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.