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Crown Theater is the only movie theater in the city. Its cost and revenue curves are shown in Figure 11-5. Monopolist C...

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Crown Theater is the only movie theater in the city. Its cost and revenue curves are shown in Figure 11-5. Monopolist Crown Theater would set the price of its tickets at

a.

$6.00.
b.

$7.50.
c.

$3.00.
d.

$4.50.
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Answer #1

Answer : The answer is option b.

A monopolist produce that output level where MR = MC occur. On this output level the monopolist charge the price level which is equal to demand. Here the monopolist's  profit maximizing output level is 100 tickets where the demand is 7.50. So, here the monopolist will set the price level at $7.50 . Therefore, option b is correct.

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