Helen Jenkins is an employee at Brooklyn & Company, Inc. She has an effort cost function of C = 2e²and a reservation wage of $4,000.

Her compensation package is W = 4,000 + 0.3Q where the incentive coefficient = 0.3 and Q = 400e. Q is the output.

• If the CEO increases the incentive from 0.3 to 0.4, what happens to the Helen 's effort? (10 points)
• If the CEO increases the incentive from 0.3 to 0.4, what happens to Brooklyn & Company, Inc.'s profit? (10 points)