Final answer:
In response to increased demand for its hats, Heggood Inc. will increase its demand for labor and capital to boost production, contrary to decreasing the price or demand for labor, or increasing the rental price of capital.
Step-by-step explanation:
If Heggood Inc., a perfectly competitive firm, experiences an increase in the demand for its hats, the company will likely see an increase in output price and profitability. Considering this scenario, Heggood Inc. will not decrease the price of hats (a) because higher demand justifies higher prices in perfect competition. Instead, it will likely increase its demand for labor (c) to ramp up production and meet the elevated demand.
As a consequence, the quantity of labor demanded will also increase, contradicting option (b). Additionally, Heggood Inc. may increase its demand for capital (d) as more resources will be needed for expanded production. The rental price of capital (e) might rise if the demand for capital across the market increases, but this is a consequence of the market rather than a direct action taken by Heggood Inc.