Paducah Slugger Company makes baseball bats out of lumber supplied to it by Acme Sporting Goods, which pays Paducah $10 for each finished bat. Paducah's only factors of production are lathe operators and a small building with a lathe. The number of bats per day 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 building is $50. Instructions: Complete the table below. If you are entering any negative numbers be sure to include a negative sign (−) in front of those numbers. Express marginal cost values rounded to the nearest penny (two decimal places). Q (bats per day)Number of employee-hours per dayTotal revenue($ per day)Total labor cost($ per day)Total cost($ per day)Profit($ per day)Marginal costper bat00 —51 102 154 207 2511 3016 3522 What is the profit-maximizing quantity of bats (note the values for MR and MC)? bats. b. What 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 c have such different effects? multiple choiceA tax of $10 per day doesn't affect the firm's profit, while a tax of $2 per bat does.A tax of $10 per day affects the firm's profit, while a tax of $2 per bat does not.A tax of $10 per day does not affect marginal cost, while a tax of $2 per bat does.A tax of $10 per day affects marginal cost, while a tax of $2 per bat does not. Paducah Slugger Company makes baseball bats out of lumber supplied to it by Acme Sporting Goods,which pays Paducah $10 for each finished bat. Paducah's only factors of production are lathe operatorsand a small building with a lathe. The number of bats per day it produces depends on the number ofemployee-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 building is $50.Instructions: Complete the table below. If you are entering any negative numbers be sure to Include anegative sign (-) In front of those numbers. Express marginal cost values rounded to the nearest penny(two decimal places).Number ofemployee-hoursper dayTotalTotal labor(bats perday)MarginalCostper batrevenuecostTotal costProfit($ per day)($ per day)($ per day)10215420251130163522What is the profit-maximizing quantity of bats (note the values for MR and MC)?bats.b. What would Paducah's profit-maximizing level of output be if the government imposed a tax of $10 perday on the company? (Hint. Think of this tax as eguivalent 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 perbạt instead of the $10 tax of part b? (Hint Think of this tax as a $2 per bat increase in the firm's marginalcost.)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 bạt does.O A 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 does not affect marginal cost, while a tax of $2 per bạt does.O A tax of $10 per day affects marginal cost, while a tax of $2 per bạt does not.

Answered: The wage is $15 per hour and Paducah’s…

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 5PA

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Question

Paducah Slugger Company makes baseball bats out of lumber supplied to it by Acme Sporting Goods, which pays Paducah $10 for each finished bat. Paducah's only factors of production are lathe operators and a small building with a lathe. The number of bats per day 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 building is $50.

Instructions: Complete the table below. If you are entering any negative numbers be sure to include a negative sign (−) in front of those numbers. Express marginal cost values rounded to the nearest penny (two decimal places).

Q (bats per day)	Number of employee-hours per day	Marginal cost per bat
0	0	—
5	1
10	2
15	4
20	7
25	11
30	16
35	22

What is the profit-maximizing quantity of bats (note the values for MR and MC)? bats.

b. What 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 c have such different effects?

multiple choice

A tax of $10 per day doesn't affect the firm's profit, while a tax of $2 per bat does.
A tax of $10 per day affects the firm's profit, while a tax of $2 per bat does not.
A tax of $10 per day does not affect marginal cost, while a tax of $2 per bat does.
A tax of $10 per day affects marginal cost, while a tax of $2 per bat does not.

Paducah Slugger Company makes baseball bats out of lumber supplied to it by Acme Sporting Goods,
which pays Paducah $10 for each finished bat. Paducah's only factors of production are lathe operators
and a small building with a lathe. The number of bats per day 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 building is $50.
Instructions: Complete the table below. If you are entering any negative numbers be sure to Include a
negative sign (-) In front of those numbers. Express marginal cost values rounded to the nearest penny
(two decimal places).
Number of
employee-hours
per day
Total
Total labor
(bats per
day)
Marginal
Cost
per bat
revenue
cost
Total cost
Profit
($ per day)
($ per day)
($ per day)
10
2
15
4
20
25
11
30
16
35
22
What is the profit-maximizing quantity of bats (note the values for MR and MC)?
bats.
b. What 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 eguivalent 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
bạt 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 bạt does.
O A 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 does not affect marginal cost, while a tax of $2 per bạt does.
O A tax of $10 per day affects marginal cost, while a tax of $2 per bạt does not.

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