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The economic staff of the U.S. Department of the Treasury has been asked to recommend a new tax policy concerning the treatment of the
foreign earnings of U.S. firms. Currently the foreign earnings of U.S. multinational companies are taxed only when the income is returned to
the United States. Taxes are deferred if the income is reinvested abroad. The department seeks a tax rate that will maximize total tax revenue
from foreign earnings. Find the optimal tax rate if:
a. B(t) =80 -100t
b. B(t) =80 - 240t2
c. B(t)= 80 -80?t
where B(t) is the foreign earnings of U.S. multinational companies returned to the United States and t is the tax rate.
After Henry ford invented the assembly line for producing automobiles, other automobile companies copied his invention. The new technology rise the economies of scale in automobile producing.
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