?A baseball team plays in a stadium that seats 55,000 spectators. With ticket prices at

Chapter 4, Problem 67

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QUESTION:

A baseball team plays in a stadium that seats 55,000 spectators. With ticket prices at $10, the average attendance had been 27,000. When ticket prices were lowered to $8, the average attendance rose to 33,000.

(a) Find the demand function, assuming that it is linear.

(b) How should ticket prices be set to maximize revenue?

Questions & Answers

QUESTION:

A baseball team plays in a stadium that seats 55,000 spectators. With ticket prices at $10, the average attendance had been 27,000. When ticket prices were lowered to $8, the average attendance rose to 33,000.

(a) Find the demand function, assuming that it is linear.

(b) How should ticket prices be set to maximize revenue?

ANSWER:

Step 1 of 6

a)

Let

be the demand function.

From the data we are given, we have

and

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