Megacola faces demand of Q = 2,200 – 20P. Its

Megacola faces demand of Q = 2,200 – 20P. Its costs are constant at $5 per unit.

a. Show that Megacola will not change its behavior if the government introduces a 20% tax on its profits.

b. Does the existence of firms such as Megacola strengthen or weaken the case for a corporate income tax? Explain.