Scenario 14-6
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 14-6.How much profit will the concert promoters earn if they set the price of each ticket at $50?

Question

Quizplus · Accepted Answer

If each ticket is sold for $50, the total revenue from die-hard fans (1000 x $150) and casual fans (500 x $50) would be $200,000. After deducting the cost of the concert ($50,000), the profit would be $150,000. However, since there are only 1500 seats available and 1000 of them are already taken by die-hard fans, only 500 tickets can be sold to the casual fans. Therefore, the total revenue would be 500 x $50 = $25,000. After deducting the cost of the concert, the profit would be $25,000.

Scenario 14-6 The Concert Promoters of a Heavy-Metal Band,WeR2Loud,know That There Are