A Every movie I see in theaters costs me 725 That is to say

A) Every movie I see in theaters costs me $7.25. That is to say, the marginal cost of seeing a movie in theaters is $7.25. I have done extensive calculations and found that the marginal benefit I recieve from each movie in a given year is defined by this equation:

Given this information, how many movies should I see in theaters this year?

Solution

For the equilibrium Marginal Benefit = Marginal Cost

23 - (x/4) = 7.25x

23 = 7.25x + x/4

23 = (29x + x )/4

23 = 30x/4

92 = 30x

x = 3.0667

So the number of movies is 3. At 3 movies Marginal Cost is $21.75 and Marginal Benifit is $22.25. Since marginal benefit is more then marginal cost it is an equilibrium point.