A local symphony has figured, through local demand analysis that for every $1 increase in the price of its ticket, there will be a corresponding drop of 100 fewer tickets sold. If the fixed cost of a production is $100,000, the cost of each performance is $10,000 and the cost for attracting each person attending is $10. The symphony is examining five price points -$30, $35, $40, $45 and $50. The symphony historically priced its tickets at $40 and averaged attendance of 6,000 over the course of six shows. The theater's capacity is 10,000 over the six-show run. Which price offers the optimum price point for the symphony?
A) $30 ($0 profit)
B) $35 ($12,500 profit)
C) $40 ($20,000 profit)
D) $45 ($22,500 profit)
E) $50 (20,000 profit)
Correct Answer:
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