In the same football conference as the university in Problem 9 is another university where the demand for football tickets at each game is 60,000 - 8,000p. If the capacity of the stadium at that university is 40,000 seats, what is the revenue-maximizing price for this university to charge per ticket?

Question

Quizplus · Accepted Answer

To maximize revenue, set marginal revenue (MR) equal to zero. The demand function is Q = 60,000 - 8,000p. Revenue (R) is price (p) times quantity (Q), so R = p(60,000 - 8,000p). Differentiate R with respect to p and set the derivative equal to zero to find the revenue-maximizing price. Solving this gives p = $3.75.

In the Same Football Conference as the University in Problem