A football stadium has a fixed number of seats.Given this,how should stadium management determine ticket prices? A)When MRMC,price to fill capacity D)Both A&C

Question

A football stadium has a fixed number of seats.Given this,how should stadium management determine ticket prices?
A)​When MR<MC,do not price to fill capacity
B)When MR<MC,price to fill capacity
C)When MR>MC,price to fill capacity
D)​Both A&C

Quizplus · Accepted Answer

The correct approach to pricing in this scenario involves understanding the relationship between Marginal Revenue (MR) and Marginal Cost (MC). When MR < MC, it's not economically beneficial to aim for full capacity since the cost of serving an additional customer is higher than the revenue they bring. Conversely, when MR > MC, pricing to fill capacity is advantageous because each additional customer adds more to revenue than to costs. Therefore, both A and C are correct strategies depending on the MR and MC conditions.

A Football Stadium Has a Fixed Number of Seats