BYOB is a monopolist in beer production and distribution in the imaginary economy of Hopsville. Suppose that BYOB cannot price discriminate; that is, it sells its beer at the same price per can to all customers. The following graph shows the marginal cost (MC), marginal revenue (MR), average total cost (ATC), and demand (D) for beer in this market.Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss Suppose that BYOB charges $2.75 per can. Your friend Charles says that since BYOB is a monopoly with market power, it should charge a higher price of $3.00 per can because this will increase BYOB’s profit. omplete the following table to determine whether Charles is correct.PriceQuantity DemandedTotal RevenueTotal CostProfit(Dollars per can)(Cans)(Dollars)(Dollars)(Dollars)2.75 3.00 Given the earlier information, Charles correct in his assertion that BYOB should charge $3.00 per can. Suppose that a technological innovation decreases BYOB’s costs so that it now faces the marginal cost (MC) and average total cost (ATC) given on the following graph. Specifically, the technological innovation causes a decrease in average fixed costs, thereby lowering the ATC curve and moving the MC curve. Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing the loss. b. Answered: Consider the competit X* MindTap - Cengage LearningA ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=59828118170010561930692029148&elSBN=9780357133606&snapshotld=2556323&id=1270090856&E Apps M GmailYouTube A Maps A clickserve.dartsearc.E Reading list«* CENGAGE MINDTAPQ Search this courseLove vA My HomeHomework (Ch 15)(diamond symbols) to shade in the area representing its loss.Courses(?O Catalog and Study ToolsA-ZEE Rental Options4.00P College Success Tips3.50Career Success TipsMonopoly Outcome3.00? HelpATC2.50ProfitO Give Feedback2.00Loss1.50MCbongo1.000.50MR0.51.01.52.02.53.03.54.0QUANTITY (Thousands of cans of beer)5:47 PMP Type here to searchL23%44°FO O O 4»)12/8/2021PRICE (Dollars per can)x ... b. Answered: Consider the competit X* MindTap - Cengage LearningA ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=59828118170010561930692029148&elSBN=9780357133606&snapshotld=2556323&id=1270090856&E Apps M GmailYouTube A Maps A clickserve.dartsearc.E Reading list«* CENGAGE MINDTAPQ Search this courseLove vA My HomeHomework (Ch 15)rectangle (diamond symbols) to shade in the area representing the loss.Courses(?)O Catalog and Study ToolsA-ZEE Rental Options4.00- College Success Tips3.50Career Success TipsMonopoly Outcome3.00? Help2.50ProfitO Give Feedback2.00ATCLos1.50bongo1.000.50 tMCDMR0.51.01.52.02.53.03.54.0QUANTITY (Thousands of cans of beer)5:49 PMO Type here to searchL24%44°FO O O 4»)12/8/2021PRICE (Dollars per unit)x ...

Question

BYOB is a monopolist in beer production and distribution in the imaginary economy of Hopsville. Suppose that BYOB cannot price discriminate; that is, it sells its beer at the same price per can to all customers. The following graph shows the marginal cost (MC), marginal revenue (MR), average total cost (ATC), and demand (D) for beer in this market.Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss Suppose that BYOB charges $2.75 per can. Your friend Charles says that since BYOB is a monopoly with market power, it should charge a higher price of $3.00 per can because this will increase BYOB’s profit. omplete the following table to determine whether Charles is correct.PriceQuantity DemandedTotal RevenueTotal CostProfit(Dollars per can)(Cans)(Dollars)(Dollars)(Dollars)2.75          3.00           Given the earlier information, Charles    correct in his assertion that BYOB should charge $3.00 per can. Suppose that a technological innovation decreases BYOB’s costs so that it now faces the marginal cost (MC) and average total cost (ATC) given on the following graph. Specifically, the technological innovation causes a decrease in average fixed costs, thereby lowering the ATC curve and moving the MC curve.  Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing the loss. b. Answered: Consider the competit X* MindTap - Cengage LearningA ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=59828118170010561930692029148&elSBN=9780357133606&snapshotld=2556323&id=1270090856&E Apps M GmailYouTube A Maps A clickserve.dartsearc.E Reading list«* CENGAGE MINDTAPQ Search this courseLove vA My HomeHomework (Ch 15)(diamond symbols) to shade in the area representing its loss.Courses(?O Catalog and Study ToolsA-ZEE Rental Options4.00P College Success Tips3.50Career Success TipsMonopoly Outcome3.00? HelpATC2.50ProfitO Give Feedback2.00Loss1.50MCbongo1.000.50MR0.51.01.52.02.53.03.54.0QUANTITY (Thousands of cans of beer)5:47 PMP Type here to searchL23%44°FO O O 4»)12/8/2021PRICE (Dollars per can)x ... b. Answered: Consider the competit X* MindTap - Cengage LearningA ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=59828118170010561930692029148&elSBN=9780357133606&snapshotld=2556323&id=1270090856&E Apps M GmailYouTube A Maps A clickserve.dartsearc.E Reading list«* CENGAGE MINDTAPQ Search this courseLove vA My HomeHomework (Ch 15)rectangle (diamond symbols) to shade in the area representing the loss.Courses(?)O Catalog and Study ToolsA-ZEE Rental Options4.00- College Success Tips3.50Career Success TipsMonopoly Outcome3.00? Help2.50ProfitO Give Feedback2.00ATCLos1.50bongo1.000.50 tMCDMR0.51.01.52.02.53.03.54.0QUANTITY (Thousands of cans of beer)5:49 PMO Type here to searchL24%44°FO O O 4»)12/8/2021PRICE (Dollars per unit)x ...

Accepted Answer

Profit is maximized by producing at MR =MC and charging the maximum price consumers are willing to…

Price	Quantity Demanded	Total Revenue	Total Cost	Profit
(Dollars per can)	(Cans)	(Dollars)	(Dollars)	(Dollars)
2.75
3.00