The Case in Point on hockey teams suggested that if a sports team had a large enough stadium, it would maximize its profits by selling that quantity of tickets per game where marginal revenue was:
A) equal to price.
B) rising over the relevant range.
C) the highest possible.
D) zero.

Question

Quizplus · Accepted Answer

In economics, a firm maximizes its profit by producing up to the point where marginal revenue (MR) equals marginal cost (MC). However, in the context of selling tickets for a sports team with a large enough stadium, the optimal point for maximizing profits is where marginal revenue is zero. This is because, up to this point, each additional ticket sold adds more to revenue than it costs to sell, maximizing total profit. Beyond this point, selling more tickets would add less to revenue than the cost, reducing profit.

The Case in Point on Hockey Teams Suggested That If