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QuadPlex Cinema is the only movie theater in Idaho Falls

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QuadPlex Cinema is the only movie theater in Idaho Falls. The nearest rival movie theater, the Cedar Bluff Twin, is 35 miles away in Pocatello. Thus QuadPlex Cinema possesses a degree of market power. Despite having market power, QuadPlex Cinema is currently suffering losses. In a conversation with the owners of QuadPlex, the manager of the movie theater made the following suggestions: Since QuadPlex is a local monopoly, we should just increase ticket prices until we make enough profit.

a. Comment on this strategy. Will it work in short-run?

b. Is the Lerner index an appropriate measure for the market power of the QuadPlex Cinema? Explain briefly.

c. What options should QuadPlex consider in the long run?