The football game between Standford and the US Berkeley is going to be held at Standford Stadium, which has 60 000 seats. Customers can be segmented into students and general public. We assume that the price response curves for each of these segments is:

General public dg(pg) = (120 000 - 3000pg)

Students: ds(ps) =(20 000 -1250ps), where pg is the price charged to the general public, and ps is the student price.

Assume that 5% of the general public will masquerade as students (perhaps using borrowed ID cards) in order to save money. Assuming that Stanford knows that, what are the optimal prices for student tickets and general public tickets it should set in this case?

Answer rating: 100% (QA)

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