Asked by Pierre Chew Seng Yaw on Jun 04, 2024
Verified
At a large institution of higher learning, the demand for football tickets at each game is 100,000 6,000p.If the capacity of the stadium at that university is 60,000 seats, what is the revenue maximizing price for this university to charge per ticket?
A) $16.67
B) $8.33
C) $6.67
D) $4.17
E) $25
Revenue Maximizing Price
The price at which a company can sell its product or service to generate the maximum total revenue, considering factors like demand and price elasticity.
Football Tickets
Passes that allow entry to football (soccer or American football) games, often purchased by fans to watch their favorite teams play.
Demand
Refers to the quantity of a particular good or service that consumers are willing and able to purchase at various prices during a given period of time.
- Assess how market dynamics and external variables affect product demand.
Verified Answer
Revenue = Quantity Sold × Price
Revenue = (60,000) × (100,000 − 6,000p)
Revenue = 6,000,000,000 − 360,000,000p
To find the revenue maximizing price, we need to differentiate revenue with respect to price and set it equal to zero:
d(Revenue)/dp = -360,000,000 = 0
p = $8.33
Therefore, the university should charge $8.33 per ticket to maximize revenue.
Learning Objectives
- Assess how market dynamics and external variables affect product demand.
Related questions
When Demand Falls and Supply Rises,equilibrium Price Will __________ and ...
The Demand for Meals at a Local Chipotle Will Shift ...
Which Factor Is Likely to Cause a Rightward Shift in ...
Over the Past Several Years,consumers Have Had an Increasing Interest ...
The Demand Curve for Monthly Subscriptions to HBO Has Shifted ...