A monopoly seller of tickers to classic Japanese movies. The cost of showing the movie to an extra customer is zero. The demand curve for tickets is QD = 1500 - 100P, where QD is the number of tickets that will sell at price P and where P is given in dollars. Now suppose that there is a fixed cost of $5,000 to obtain the movie and the projector.

1. What is the price that the monopolist should charge if it wants to maximize profits? (Note: the Answer states that MR is derivative of TR, where 15 - 0.02Qd, but I do not know where the answer of Qd = 750 came from).

2. What is the quantity of tickets sold at that price? - Again, I do not know how the answer came up with 750.

3. What is the consumer surplus?

4. What is the monopolist\'s profit?

Answer rating: 100% (QA)

Question ... View the full answer