The market power of Cinemex was monopolistic. For instance, the movie houses were free to enter the market and could also secure the same movies as Cinemex. However, they lacked the size of venues as large as those Cinemex owned. The other firms introduced the 2-1 policy. The policy enabled people to buy a ticket and given one extra. The move greatly affected Cinemex sales and the management at first was adamant to lower its price. The company also had an absolute advantage over its competitors by having a large theatre. Moreover, the firm specialized in customer service. Therefore, the market power was monopolistic.
b. The long-run cost-based strategy is maintaining the prices and increasing efficiency. Cinemex being a large corporation can rent more venues and enjoy economies of skill at the same time promoting its brand to remain monopolistic. The firm can also identify the consumer surplus and charge prices depending on the purchasing power of each customer.