Complete the following table to determine whether Adrian is correct.QuantityDemandedTotalRevenue(Dollars)(Cans)Given the earlier information, Adriancharge $3.00 per bottle.Price(Dollars perbottle)2.753.00PRICE (Dollars per unit)Suppose that a technological innovation decreases Lagatt Green's costs so that it now faces themarginal cost (MC) and average total cost (ATC) given on the following graph. Specifically, thetechnological innovation causes a decrease in average fixed costs, thereby lowering the ATC curveand moving the MC curve.4.00Place the black point (plus symbol) on the following graph to indicate the profit-maximizing priceand quantity for Lagatt Green. If Lagatt Green is making a profit, use the green rectangle (trianglesymbols) to shade in the area representing its profit. On the other hand, if Lagatt Green issuffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing theloss.3.503.002.502.001.501.000.500MC0ATC0.51.01.52.02.5QUANTITY (Thousands of bottles of beer)MR3.03.5D4.0correct in his assertion that Lagatt Green shouldTotal Cost(Dollars)Monopoly OutcomeProfitProfit(Dollars)Loss(?) 4. Profit maximization and loss minimizationLagatt Green is a monopoly beer producer and distributor operating in the hypothetical economy of Lightington. Assume that Lagatt Green is not ableprice discriminate, and so it sells its beer to all customers at the same price per bottle. The following graph gives the marginal cost (MC), marginalrevenue (MR), average total cost (ATC), and demand (D) curves that Lagatt Green faces for beer in Lightington.Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity for Lagatt Green. If Lagatt Green is making aprofit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if Lagatt Green is suffering a loss,use the purple rectangle (diamond symbols) to shade in the area representing its loss.PRICE (Dollars per bottle)4.003.503.002.502.001.501.000.500MC0ATC0.51.01.52.02.5QUANTITY (Thousands of bottles of beer)MR3.03.5D4.0Monopoly OutcomeProfitLossSuppose Lagatt Green charges $2.75 per bottle. Your study partner Adrian says that because Lagatt Green is a monopoly with market power, it shouldcharge the higher price of $3.00 per bottle in order to increase its profit.

Profit is maximized where MR is the marginal revenue. Profit is when Total Revenue is greater than…

Complete the following table to determine whether Adrian is correct. Quantity Demanded Total Revenue (Cans) (Dollars) Price (Dollars per bottle) 2.75 3.00 Given the earlier information, Adrian charge $3.00 per bottle. Total Cost (Dollars) Profit (Dollars) correct in his assertion that Lagatt Green should

Complete the following table to determine whether Adrian is correct. Quantity Demanded Total Revenue (Cans) (Dollars) Price (Dollars per bottle) 2.75 3.00 Given the earlier information, Adrian charge $3.00 per bottle. Total Cost (Dollars) Profit (Dollars) correct in his assertion that Lagatt Green should

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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