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Suppose Fantastic Films charges a single price for all tickets. Identify the monopoly outcome (PM, QM). Sketch a graph of the theater's demand functions, marginal revenue, and marginal cost to find the following: 1. The firm's profit-maximizing price = $____? 2. Ticket output = ____? 3. Economic profit = $ ____?

Suppose Fantastic Films charges a single price for all tickets. Identify the monopoly outcome (PM, QM). Sketch a graph of the theater's demand functions, marginal revenue, and marginal cost to find the following: 1. The firm's profit-maximizing price = $____? 2. Ticket output = ____? 3. Economic profit = $ ____?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose Fantastic Films charges a single price for all tickets. Identify the monopoly outcome (PM, QM).

Sketch a graph of the theater's demand functions, marginal revenue, and marginal cost to find the following:

1. The firm's profit-maximizing price = $____?

2. Ticket output = ____?

3. Economic profit = $ ____?

4. Compute consumer surplus, producer surplus, and deadweight loss

Price ($ per ticket) 20 18 16 14 12 10 6 4 Quantity (Tickets per show) 0 100 200 300 400 500 600 700 800 Total revenue (dollar per show) 0 1,800 3,200 4,200 4,800 5,000 4,800 4,200 3,200 MR ($) 1800-0 100-0 = 18 14 10 6 -2 -6 -10 = 1800 100 Total cost ($) MC ($) 1000 1600 2200 2800 3400 4000 4600 5200 5800 1600-1000 100-0 = 6 6 6 6 6 6 600 100
Transcribed Image Text:Price ($ per ticket) 20 18 16 14 12 10 6 4 Quantity (Tickets per show) 0 100 200 300 400 500 600 700 800 Total revenue (dollar per show) 0 1,800 3,200 4,200 4,800 5,000 4,800 4,200 3,200 MR ($) 1800-0 100-0 = 18 14 10 6 -2 -6 -10 = 1800 100 Total cost ($) MC ($) 1000 1600 2200 2800 3400 4000 4600 5200 5800 1600-1000 100-0 = 6 6 6 6 6 6 600 100
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