Suppose that you want to put on a parade in your home town of 1000 people.The cost of the parade is $6000 and each person values the parade at $5.After a month,you have only sold 50 tickets at $5 each.What is the result
A)The local government will put on the parade but you will not.
B)You will still put on the parade but the local government will not.
C)Neither you nor the local government will put on the parade.
D)You and the local government will compete for the parade.

Question

Quizplus · Accepted Answer

At $5 per person, you need at least 1200 people to buy tickets in order to cover the cost of the parade ($6000 / $5 = 1200). Since only 50 tickets have been sold after a month, it is unlikely that enough people will buy tickets to cover the cost. Therefore, neither you nor the local government should put on the parade to avoid financial loss.

Suppose That You Want to Put on a Parade in Your