Dan is the owner of a price-taking company that manufactures sporting goods.One particular facility Dan owns produces baseball bats and baseball gloves.His cost function for baseball bats is CB(QB,QG) = 100QB + QB2 + QBQG and the marginal cost is MCB = 100 + 2QB + QG,where QB is the output level for bats and QG is the output level for gloves.Dan's cost function for baseball gloves is CG(QB,QG) = 50QG + QG2 + QGQB,and the marginal cost is MCG = 50 + 2QG + QB.The price of a baseball bat is $240 and the price of a baseball glove is $150.If he only produced gloves,what would Dan's profit be if he produces the profit-maximizing quantity?
A) $2,000
B) $2,200
C) $2,500
D) $3,100
Correct Answer:
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