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Complete the following table to determine whether Musashi is correct. If BYOB is suffering a loss, enter a negative value for profit. Price Quantity Demanded Total Revenue Total Cost Profit (Dollars per can) (Cans) (Dollars) (Dollars) (Dollars) 2.75 1,500 3.00

Complete the following table to determine whether Musashi is correct. If BYOB is suffering a loss, enter a negative value for profit. Price Quantity Demanded Total Revenue Total Cost Profit (Dollars per can) (Cans) (Dollars) (Dollars) (Dollars) 2.75 1,500 3.00

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that BYOB charges $2.75 per can. Your friend Musashi says that since BYOB is a monopoly with market power, it should charge a higher p of $3.00 per can because this will increase BYOB's profit. Complete the following table to determine whether Musashi is correct. If BYOB is suffering a loss, enter a negative value for profit. Price Quantity Demanded Total Revenue Total Cost Profit (Dollars per can) (Cans) (Dollars) (Dollars) (Dollars) 2.75 1,500 v 3.00 Given the earlier information, Musashi v 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. lyp 144 ho Pil PDI delete $4 8 backspace R K B M prt sc LE alt
Transcribed Image Text:Suppose that BYOB charges $2.75 per can. Your friend Musashi says that since BYOB is a monopoly with market power, it should charge a higher p of $3.00 per can because this will increase BYOB's profit. Complete the following table to determine whether Musashi is correct. If BYOB is suffering a loss, enter a negative value for profit. Price Quantity Demanded Total Revenue Total Cost Profit (Dollars per can) (Cans) (Dollars) (Dollars) (Dollars) 2.75 1,500 v 3.00 Given the earlier information, Musashi v 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. lyp 144 ho Pil PDI delete $4 8 backspace R K B M prt sc LE alt
Homework (Ch 09) 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 ools 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. (?) Tips 4.00 Tips 2 3.50 Monopoly Outcome 3.00 ATC ools 2.50 Profit 2.00 Principles of 1.50 Loss MC 1.00 0 50 0.5 1.0 1.5 20 25 3.0 35 40 QUANTITY OF OUTPUT (Thousands of cans of beer) Suppose that BYOB charges $2.75 per can. Your friend Musashi 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. - Search * do 144 DDI delete home 3 4. 6. backspace nurs loc R G enter M prt sc ↑ shift. alt PRICE AND COST PER UNT (Dollars per can)
Transcribed Image Text:Homework (Ch 09) 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 ools 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. (?) Tips 4.00 Tips 2 3.50 Monopoly Outcome 3.00 ATC ools 2.50 Profit 2.00 Principles of 1.50 Loss MC 1.00 0 50 0.5 1.0 1.5 20 25 3.0 35 40 QUANTITY OF OUTPUT (Thousands of cans of beer) Suppose that BYOB charges $2.75 per can. Your friend Musashi 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. - Search * do 144 DDI delete home 3 4. 6. backspace nurs loc R G enter M prt sc ↑ shift. alt PRICE AND COST PER UNT (Dollars per can)
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