An engine can only breath so much. To test this, simply pull the MAF up and disconnect it from the stock air box or the conical filter. How much HP do you think you'll gain? It's completely unrestricted at this point.
Given the options of "stock air box with paper filter" or "underhood conical K&N", the choice is obvious. "Underhood conical K&N". Given the options of "stock air box with K&N filter" or "underhood conical K&N" for a 500hp or less engine, I'd say they'd breathe equally well although the underhood would give you hotter, less dense air. It may cool off as you move, but my guess would be that the fender air is cooler, AND don't we start a race standing still?
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351W 89 Mustang GT Convertible