Baseball team and local stadium has commissioned study

Assignment Help Business Economics

Reference no: EM13892030

1. The owner of a baseball team and local stadium has commissioned a study that showed the demand by fans for stadium seats (per playing date) to be P = 22 - 0.2Q, where P is the average price of a ticket and Q represents the number of seats (expressed in thousands). The local stadium seats a maximum of 56,000 per game. The price has been set at $10 per ticket. (Note: Assume that all seats and all games are the same in this problem.)

a. If the owner is only interested in maximizing revenue, has he over-priced or under-priced the tickets?

b. Suppose the owner offers you 10% of any increase in revenues that you can generate. If you can only choose a uniform per-ticket price, what is the maximum amount you can earn per game?

Reference no: EM13892030

Questions Cloud

Measured by forgone benefits of the next-best alternative : Opportunity cost is associated with choosing a particular decision that is measured by the forgone benefits of the next-best alternative. What example would you pose to explain this?

Let the random variable x follow a normal distribution : Let the random variable X follow a normal distribution with U(mu) = 50 and S2 = 64. Find the probability that X is less than 55. The probability is 0.2 that X is greater than what number?

Calculate your annual rate of return : Your cousin Jeremy has asked you to bankroll his proposed business painting houses in the summer. He plans to operate the business for 5 years to pay his way through college. He needs $5000 to purchase an old pickup, some ladders, a paint sprayer, an..

The multiplier effect of change in government purchases : The multiplier effect of a change in government purchases. Suppose the government in this economy decides to decrease government purchases by $250 billion. The decrease in government purchases will lead to a decrease in income, generating an initial ..

Baseball team and local stadium has commissioned study : The owner of a baseball team and local stadium has commissioned a study that showed the demand by fans for stadium seats (per playing date) to be P = 22 - 0.2Q, where P is the average price of a ticket and Q represents the number of seats (expressed ..

Long-run real interest rates are expected to increase : Long-run real interest rates are expected to increase. An accountant and an MBA student (who just finished his course of Managerial Economics) where interviewed regarding the effect on the firm they both work at. Keeping all else constant, their answ..

Assume that all seats and all games are the same in problem : The owner of a baseball team and local stadium has commissioned a study that showed the demand by fans for stadium seats (per playing date) to be P = 22 - 0.2Q, where P is the average price of a ticket and Q represents the number of seats (expressed ..

Which of the represents a short-run decision : Which of the following represents a short-run decision? A farmer discovers that the total cost of growing 2000 acres of corn is $400,000 and that the total cost of growing 2001 acres of corn is $401,000. The marginal cost of the 2001st acre of corn i..

Multi country or localized strategies : Which of the following is not one of the primary strategy options for competing in the markets of foreign countries? Multi country or localized strategies. Forming alliances and partnerships with local companies in every country market where the comp..

User Account

All Pages