Question

In: Economics

Use the following information to answer questions 1-4. You have achieved a dream job working for...

Use the following information to answer questions 1-4.

You have achieved a dream job working for the Toledo Mud Hens. You estimate the demand for general admission tickets as follows.

Price Quantity
15 5000
14 6000
13 7000
12 8000
11 9000
10 10000

The marginal cost of selling a ticket is $2. Other fixed costs per game equal $5000. Finally, the seating capacity is 9000.

Question 1 (0.5 points)

What is the profit maximizing price?

Question 1 options:

15

14

13

None of the above

Question 2 (0.5 points)

What is the total cost at the profit maximizing price?

Question 2 options:

19000

21000

23000

None of the above

Question 3 (0.5 points)

Saved

What is the profit at the profit maximizing price?

Question 3 options:

76000

60000

47000

None of the above

Question 4 (0.5 points)

Suppose some new seats are added to the stadium (ignore the cost of adding these seats for the purpose of this question), and hence the capacity increases to 10000. With this new seating capacity, what price do you recommend?

Question 4 options:

10

11

12

None of the above

Solutions

Expert Solution

Rahul Sunny answered 8 months ago
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