Based on your analysis, which contractual form(s) are profit-maximizing parties most likely to adopt as part of a negotiated contract: i.) the royalty on revenue; ii.) the per-unit royalty payment; or iii.) the profit tax? Explain. What role does economic efficiency play in determining the terms and conditions of contracts adopted?

Consider an investor interested in a firm whose inverse demand equals: P = 800 - 2Q. The firm's marginal cost of output is constant and equals $160 per-unit. The profit- maximizing firm produces 160 units in each period (MR = 800 - 4Q = 160; so Q = 160, and sets its price at $480 (800 - 2x160)). At this level of output, firm revenue equals $76,800 (160 x $480) and its profit equals $51,200 (($480 - $160) x 160).