The average ticket price for a concert at the opera house was $25. The average attendance...

The average ticket price for a concert at the opera house was $25. The average attendance was 4000. when the ticket price was raised to $29 attendance decline to an average of 3600 people per performance.

What should the ticket price be to maximize revenue for the opera house? (assuming a linear demand curve.)

Solutions

Expert Solution

steps- as given in picture. First find out the linear equation from formula y= mx+c where m is slope. Find out slope from y2-y1/x2-x1.

Then put the equation in revenue= price*quantity.

You will get a quadratic equation. To maximise revenue you have to keep derivative of revenue equal to zero as at maximum revenue MR. =0. Shown in figure.

Rahul Sunny answered 1 year ago

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