2. A football team has two kinds of fans. Adults demand Qa(p) = 1,000(100 – P) tickets when the price is P. Senior citizens demand Qs(p) = 1,000(60 – P). Marginal cost is equal to zero, and the stadium has capacity K. Find the profit-maximizing ticket prices when K< 80,000 and resale of tickets is impossible.

2. A football team has two kinds of fans. Adults demand Qa(p) = 1,000(100 – P) tickets when the price is P. Senior citizens demand Qs(p) = 1,000(60 – P). Marginal cost is equal to zero, and the stadium has capacity K. Find the profit-maximizing ticket prices when K< 80,000 and resale of tickets is impossible.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 9MC

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3.2. The stadium of the MANU has 30 seats. The demand curve for tickets has a price intercept of $36 and a quantity intercept of 72.3.2.1. Draw the supply and demand curves to scale (in Excel and copy it to your word answer-This demand curve has the form P = 36−0.5×Q.) 3.2.2. Determine the equilibrium admission price, and the amount of revenue generated from ticket sales for eachgame. 3.2.3. A local alumnus and benefactor offer to install 6 more seats at no cost to the University. Compute the price that would be charged with this new supply and compute the revenue that would accrue at this new equilibrium price. Should the MANU accept the offer to install the seats?
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