Question

Monopoly: Fantastic Films is the only movie theater in an isolated town. The table below illustrates...

Monopoly: Fantastic Films is the only movie theater in an isolated town. The table below illustrates the demand schedule for movie tickets and the cost schedule for producing the movies. Complete the table. Maximize your browser window to view all columns in the table. Price ($ per ticket) Quantity (tickets per show)

Price ($ per ticket)

Quantity (tickets per show)

Total Revenue (dollars per show)

Marginal Revenue

Total Cost (dollars per show)

Marginal Cost

20

0

1000

18

100

1600

16

200

2200

14

300

2800

12

400

3400

10

500

4000

8

600

4600

6

700

5200

4

800

5800

Sketch a graph of the theater's demand functions, marginal revenue, and marginal cost on a sheet of graph paper. Recall that you will use the midpoint method to plot the marginal functions, MR and MC.

Upload your sketch.

2)Suppose Fantastic Films charges a single price for all tickets. Identify the monopoly outcome (PM, QM). Calculate the firm's profit maximizing price $ , output  tickets, and economic profit $  .

3)

Compute consumer surplus, producer surplus, and deadweight loss.

Consumer surplus

Producer surplus

Deadweight loss

4)

If the movie theater industry were perfectly competitive, how many tickets would be sold and what would be the price of each ticket? [competitive outcome, (Pcomp, Qcomp)]

Competitive price: $ ["$13 per ticket", "$5 per ticket", "$12 per ticket", "$10 per ticket", "$6 per ticket"]         per ticket

Competitive output: ["700 tickets", "800 tickets", "350 tickets", "400 tickets", "750 tickets"]         tickets

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