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 (MCMC), marginal revenue (MRMR), average total cost (ATCATC), and demand (D�) for beer in this market.On the following graph, place the black point (plus symbol) 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. If BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. Suppose that BYOB charges $2.50 per can. Your friend Felix 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. Complete the following table to determine whether Felix is correct. (Hint: If BYOB is suffering a loss, enter a negative value for profit.)PriceQuantity DemandedTotal RevenueTotal CostProfit(Dollars per can)(Cans)(Dollars)(Dollars)(Dollars)2.50 3.00 Given the earlier information, Felix 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 (MCMC) and average total cost (ATCATC) given on the following graph. Specifically, the technological innovation causes a decrease in average fixed costs, thereby lowering the ATCATC curve and moving the MCMC curve.On the following graph, place the black point (plus symbol) 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. If BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing the loss. 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 totalcost (ATC), and demand (D) for beer in this market.On the following graph, place the black point (plus symbol) 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. If BYOB is suffering a loss, use the purple rectangle (diamondsymbols) to shade in the area representing its loss.4.00PRICE AND COST PER UNIT (Dollars per can)2.50ATC2.00X1.501.00MCMR0.51.01.52.02.53.0 3.5QUANTITY OF OUTPUT (Thousands of cans of beer)3.503.000.500D4.0Monopoly OutcomeProfitLossSuppose that BYOB charges $2.50 per can. Your friend Felix 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. Complete the following table to determine whether Felix is correct. (Hint: If BYOB is suffering a loss, enter a negative value for profit.)Total CostProfitQuantity Demanded Total Revenue(Cans)(Dollars)(Dollars)(Dollars)Price(Dollars per can)2.503.00Given the earlier information, FelixSuppose that a technological innovation decreases BYOB's costs so that it now faces the marginal cost (MC) and average total cost (ATC) given onthe following graph. Specifically, the technological innovation causes a decrease in average fixed costs, thereby lowering the ATC curve and movingthe MC curve.On the following graph, place the black point (plus symbol) 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. If BYOB is suffering a loss, use the purple rectangle (diamondsymbols) to shade in the area representing the loss.PRICE AND COST PER UNIT (Dollars per unit)4.003.503.002.502.001.501.000.5000correct in his assertion that BYOB should charge $3.00 per can.MOMRATC3.0 3.50.5 1.0 1.5 2.0 2.5QUANTITY OF OUTPUT (Thousands of cans of beer)D4.0Monopoly OutcomeProfitLoss

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 (MCMC), marginal revenue (MRMR), average total cost (ATCATC), and demand (D�) for beer in this market.On the following graph, place the black point (plus symbol) 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. If BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. Suppose that BYOB charges $2.50 per can. Your friend Felix 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. Complete the following table to determine whether Felix is correct. (Hint: If BYOB is suffering a loss, enter a negative value for profit.)PriceQuantity DemandedTotal RevenueTotal CostProfit(Dollars per can)(Cans)(Dollars)(Dollars)(Dollars)2.50          3.00           Given the earlier information, Felix    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 (MCMC) and average total cost (ATCATC) given on the following graph. Specifically, the technological innovation causes a decrease in average fixed costs, thereby lowering the ATCATC curve and moving the MCMC curve.On the following graph, place the black point (plus symbol) 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. If BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing the loss. 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 totalcost (ATC), and demand (D) for beer in this market.On the following graph, place the black point (plus symbol) 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. If BYOB is suffering a loss, use the purple rectangle (diamondsymbols) to shade in the area representing its loss.4.00PRICE AND COST PER UNIT (Dollars per can)2.50ATC2.00X1.501.00MCMR0.51.01.52.02.53.0 3.5QUANTITY OF OUTPUT (Thousands of cans of beer)3.503.000.500D4.0Monopoly OutcomeProfitLossSuppose that BYOB charges $2.50 per can. Your friend Felix 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. Complete the following table to determine whether Felix is correct. (Hint: If BYOB is suffering a loss, enter a negative value for profit.)Total CostProfitQuantity Demanded Total Revenue(Cans)(Dollars)(Dollars)(Dollars)Price(Dollars per can)2.503.00Given the earlier information, FelixSuppose that a technological innovation decreases BYOB's costs so that it now faces the marginal cost (MC) and average total cost (ATC) given onthe following graph. Specifically, the technological innovation causes a decrease in average fixed costs, thereby lowering the ATC curve and movingthe MC curve.On the following graph, place the black point (plus symbol) 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. If BYOB is suffering a loss, use the purple rectangle (diamondsymbols) to shade in the area representing the loss.PRICE AND COST PER UNIT (Dollars per unit)4.003.503.002.502.001.501.000.5000correct in his assertion that BYOB should charge $3.00 per can.MOMRATC3.0 3.50.5 1.0 1.5 2.0 2.5QUANTITY OF OUTPUT (Thousands of cans of beer)D4.0Monopoly OutcomeProfitLoss

Accepted Answer

As per economics, a cost curve is a graph of the costs of production as a function of the aggregate…

Price	Quantity Demanded	Total Revenue	Total Cost	Profit
(Dollars per can)	(Cans)	(Dollars)	(Dollars)	(Dollars)
2.50
3.00