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. How would the profit-maximizing sales quantities for bats and gloves change if the price of bats was $270?
A. The quantities of bats and gloves will remain unchanged.
B. The quantity of gloves will increase while the quantity of bats will decrease.
C. The quantity of bats will increase while the quantity of gloves will decrease.
D. The quantities of bats and gloves will both increase.
C. The quantity of bats will increase while the quantity of gloves will decrease.
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