**BYOB in the Monopoly Beer Market**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.**Step 1: Determine Profit-Maximizing Price and Quantity**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.**Graph Explanation:**- **Axes:** The x-axis represents the quantity (in thousands of cans of beer), while the y-axis shows the price (in dollars per can).- **Curves:** - **Demand (D):** Downward-sloping line indicating the quantity demanded at each price. - **Marginal Revenue (MR):** Downward-sloping line showing the additional revenue from selling one more unit. - **Marginal Cost (MC):** Upward-sloping line representing the cost to produce one more unit. - **Average Total Cost (ATC):** U-shaped curve showing the average cost per unit at each level of production. **Scenario Analysis:**Suppose that BYOB charges $2.50 per can. Your friend Jake 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 Table to Evaluate Jake’s Assertion:**| Price (Dollars per can) | Quantity Demanded (Cans) | Total Revenue (Dollars) | Total Cost (Dollars) | Profit (Dollars) ||--------------------------|--------------------------|-------------------------|----------------------|------------------|| 2.50 | | | | || 3.00 | | | | |Given the earlier information, Jake ___ correct in his assertion that BYOB should charge $3.00 per can.**Technological Innovation Impact:**Supp

The profit maximizing quantity for a monopolist is where MR = MC MR is the Marginal Revenue MC is…

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. PRICE (Dollars per can) 4.00 3.50 3.00 2.50 2.00 1.50 PRICE (Dollars per unit) 1.00 0.50 Price (Dollars per can) 2.50 4.00 Given the earlier information, Jake 3.50 3.00 0 Complete the following table to determine whether Jake is correct. Quantity Demanded Total Revenue (Cans) (Dollars) 2.50 2.00 Suppose that BYOB charges $2.50 per can. Your friend Jake 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. 1.50 MC 1.00 3.00 0.50 0 0.5 1.0 2.0 2.5 3.0 QUANTITY (Thousands of cans of beer) 1.5 0 MR 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. MC ATC 0.5 1.5 3.5 MR D ATC 4.0 1.0 2.0 2.5 3.0 QUANTITY (Thousands of cans of beer) 3.5 Monopoly Outcome Profit Loss correct in his assertion that BYOB should charge $3.00 per can. D 4.0 Total Cost (Dollars) Profit (Dollars) Monopoly Outcome Profit Loss (?)