Scenario 15-6
The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die-hard fans and casual fans. For a particular WeR2Loud concert, there are 1,000 die-hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50,000, which includes the cost of the band, lighting, security, etc.
-Refer to Scenario 15-6. How much profit will the concert promoters earn if they set the price of each ticket at $150?

Question

Quizplus · Accepted Answer

The total revenue from die-hard fans is 1,000*$150 = $150,000.
The total cost of putting on the concert is $50,000.
The profit from die-hard fans is $150,000 - $50,000 = $100,000.
There are no profits from casual fans since the cost of their tickets only covers the cost of providing the seats.
Therefore, the total profit from setting the price at $150 is $100,000.

Scenario 15-6 The Concert Promoters of a Heavy-Metal Band, WeR2Loud, Know That