Paducah Slugger Company makes baseball bats out of lumber supplied to it by Acme Sporting Goods, which pays Paducah $10 foreach finished bat. Paducah's only factors of production are lathe operators and a small building with a lathe. The number of bats perday it produces depends on the number of employee-hours per day, as shown in the table below.a. The wage is $15 per hour and Paducah's daily fixed cost for the lathe and bulding is $60Instructions: Complete the table below. If you are entering any negative numbers be sure to include a negative sign (-) in front ofthose numbers. Express marginal cost values rounded to the nearest penny (two decimal places).Number ofTotalTotal laborMarginalQ (bats per employee-hours perday)revenuecostTotal costProfitcostday(8 per day) (S per day)(S per day)60($ per day)60-25per batin5015751e30901015020025030035030352515460120201051652511652253016240300352239040OEEWhat is the profit-maximizing quantity of bats (note the values for MR and MC)?bats.b. Whet would Paducah's profit-maximizing level of output be if the government imposed a tax of $10 per day on the company?(Hint Think of this tax as equivalent to a $10 increase in fixed cost)batsc What would Paducah's profit-maximizing level of output be if the government imposed a tax of $2 per bat instead of the $10 tax ofpart b? (Hint. Think of this tax as a $2 per bat increase in the firm's marginal cost)batsd. Why do the taxes in parts b and chave such different effects?O A tax of $10 per day doesn't affect the firm's profit, while a tax of $2 per bat does,O A tax of $10 per day affects the firm's profit, while a tax of $2 per bat does notOA tax of $10 per day affects marginal cost, while a tax of $2 per bat does notO A tax of $10 per day does not affect marginal cost, while a tax of $2 per bat does.

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b. Whet would Paducah's profit-maximizing level of output be if the government imposed a tax of $10 per day on the company? (Hint Think of this tax as equivalent to a $10 increase in fixed cost) bats c What would Paducah's profit maximizing level of output be if the government imposed a tax of $2 per bat instead of the $10 tax of part b? (Hint Think of this tax as a $2 per bat increase in the firm's marginal cost) bats d. Why do the taxes in parts b and chave such different effects? O A tax of $10 per day doesn't affect the firm's profit, while a tax of $2 per bat does. OA tax of $10 per day affects the firm's profit, while a tax of $2 per bat does not O A tax of $10 per day affects marginal cost, while a tax of $2 per bat does not O A tax of $10 per day does not affect marginal cost, while a tax of $2 per bat does

b. Whet would Paducah's profit-maximizing level of output be if the government imposed a tax of $10 per day on the company? (Hint Think of this tax as equivalent to a $10 increase in fixed cost) bats c What would Paducah's profit maximizing level of output be if the government imposed a tax of $2 per bat instead of the $10 tax of part b? (Hint Think of this tax as a $2 per bat increase in the firm's marginal cost) bats d. Why do the taxes in parts b and chave such different effects? O A tax of $10 per day doesn't affect the firm's profit, while a tax of $2 per bat does. OA tax of $10 per day affects the firm's profit, while a tax of $2 per bat does not O A tax of $10 per day affects marginal cost, while a tax of $2 per bat does not O A tax of $10 per day does not affect marginal cost, while a tax of $2 per bat does

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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