You are in charge of setting the optimal price for tickets for a local hockey team. The demand schedule for hockey tickets is below:
|
Price
|
Quantity
|
|
$10
|
6,000
|
|
11
|
5,900
|
|
12
|
5,750
|
|
13
|
5,500
|
|
14
|
5,200
|
|
15
|
4,900
|
|
16
|
4,500
|
|
17
|
4,000
|
|
18
|
3,500
|
What price maximizes the revenue from tickets? (Note, since marginal costs are assumed to be zero, this also maximizes profits)
Each spectator also spends money parking and on concessions. The team owns both the nearby lots and the concession stands at the arena. The team has estimated that concession profits increase by $5 per person, and for every four spectators, one parking permit that is priced at $10 is purchased. With these new sources of revenue, what is the optimal ticket price?