Consider a dance studio which is the only studio in the neighbourhood and thus acts as a monopolist. The marginal cost of providing dance classes is given by MC=50. An individual has demand from attending the studio equal to P=130-2q, where q is the number of classes attended. Which statement is correct ?

I. To maximize its profit, the studio should charge $50 for each class and $1600 membership fee.

II. To maximize its profit, the studio should charge $50 for each class and $2000 for membership fee.

III. This dance studio is not operating at the socially optimal level when it maximizes its profit because the consumer surplus is $0.

IV. To maximize its profit, the studio should provide 40 classes.

Group of answer choices

II, III and IV

II and IV

I and IV

I and II

I, II and III