Suppose that the demand for personalized license plates and the marginal cost of production in a state is as shown in Figure 16.1. If all the profits go to the government and the state wants to maximize revenue, what price should the state charge for the plates, and how many will be sold? Suppose that the state actually sets a price 10 percent lower than is profit maximizing. Show graphically by how much profits are reduced. Does the incorrect pricing cost the state very much? What might the state gain by setting the price a bit lower than the immediate profit‑maximizing level?