15.9 (0) The demand function for football tickets for a typical game at alarge midwestern university is D(p) = 200, 000 – 10, 000p. The universityhas a clever and avaricious athletic director who sets his ticket prices soas to maximize revenue. The university's football stadium holds 100,000spectators.(a) Write down the inverse demand function..(b) Write expressions for total revenueand mar-ginal revenueas a function of the number of ticketssold.(c) On the graph below, use blue ink to draw the inverse demand functionand use red ink to draw the marginal revenue function. On your graph,also draw a vertical blue line representing the capacity of the stadium.Price302520151020406080100120140160Quantity x 1,000(d) What price will generate the maximum revenue?Whatquantity will be sold at this price?.(e) At this quantity, what is marginal revenue?.At this quantity,what is the price elasticity of demand?.Will the stadium befull?

Demand function ,D(p) = 200000-10000P Total stadium capacity = 10000 a) Inverse demand function is…

15.9 (0) The demand function for football tickets for a typical game at a large midwestern university is D(p) = 200, 000 – 10, 000p. The university has a clever and avaricious athletic director who sets his ticket prices so as to maximize revenue. The university's football stadium holds 100,000 spectators. (a) Write down the inverse demand function. (b) Write expressions for total revenue and mar- ginal revenue sold. as a function of the number of tickets (c) On the graph below, use blue ink to draw the inverse demand function and use red ink to draw the marginal revenue function. On your graph, also draw a vertical blue line representing the capacity of the stadium. Price 30 25 15 10 20 40 60 80 100 120 140 160 Quantity x 1,000 (d) What price will generate the maximum revenue? What quantity will be sold at this price?_ (e) At this quantity, what is marginal revenue?. At this quantity, what is the price elasticity of demand?- Will the stadium be full? 20

15.9 (0) The demand function for football tickets for a typical game at a large midwestern university is D(p) = 200, 000 – 10, 000p. The university has a clever and avaricious athletic director who sets his ticket prices so as to maximize revenue. The university's football stadium holds 100,000 spectators. (a) Write down the inverse demand function. (b) Write expressions for total revenue and mar- ginal revenue sold. as a function of the number of tickets (c) On the graph below, use blue ink to draw the inverse demand function and use red ink to draw the marginal revenue function. On your graph, also draw a vertical blue line representing the capacity of the stadium. Price 30 25 15 10 20 40 60 80 100 120 140 160 Quantity x 1,000 (d) What price will generate the maximum revenue? What quantity will be sold at this price?_ (e) At this quantity, what is marginal revenue?. At this quantity, what is the price elasticity of demand?- Will the stadium be full? 20

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter16: Government Regulation

Section: Chapter Questions

Problem 6E

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The second-largest public utility in the nation is the sole provider of electricity in 32counties of southern Florida. To meet the monthly demand for electricity in these counties,which is given by the inverse demand function P = 1,200 − 4Q, the utility companyhas set up two electric generating facilities: Q1 kilowatts are produced at facility 1 andQ2 kilowatts are produced at facility 2 (so Q = Q1 + Q2). The costs of producing electricityat each facility are given by C1(Q1) = 8,000 + 6Q12 and C2(Q2) = 6,000 + 3Q22,respectively. Determine the profit-maximizing amounts of electricity to produce at thetwo facilities, the optimal price, and the utility company’s profits. (LO1, LO8)
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