Promoters of a major college basketball tournament estimate that the demand for tickets on the part of
Question:
a. For each segment (adults and students), find the inverse demand and marginal revenue functions.
b. Equate marginal revenue and marginal cost. Determine the profit-maximizing quantity for each segment.
c. Plug the quantities you found in (b) into the respective inverse demand curves to find the profit maximizing price for each segment. Who pays more, adults or students?
d. Determine the profit generated by each segment, and add them together to find the promoter's total profit.
e. How would your answers change if the arena where the event was to take place had only 5,000 seats?
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Related Book For
Microeconomics
ISBN: 9781464146978
1st Edition
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
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