The Cronulla Sea Eagles are evaluating ticket prices for basketball games.Studies show that Friday and Saturday night games average more than twice the fans of games on other days.The following information pertains to the stadium's normal operations per season:
$$\begin{array} { l r l }
\text { Average fans per game (all games) } & 2500 \text { fans } \
\text { Average fans per Friday and Saturday night games } & 3500 \text { fans } \
\text { Number of home games per season } & 30 \text { games } \
\text { Stadium capacity } & 3500 \text { seats } \
\text { Variable operating costs per operating hour } & \$ 5000 & \
\text { Marketing costs per season for basketball } & \$ 238750 & \
\text { Customer-service costs per season for basketball } & \$ 75000 &
\end{array}$$
The stadium is open for five operating hours on each day a game is played.All employees work by the hour except for the administrators.A maximum of one game is played per day and each fan has only one ticket per game.
The stadium authority wants to charge more for games on Friday and Saturday.What is the minimum price that should be charged for peak attendance nights?

Question

The Cronulla Sea Eagles are evaluating ticket prices for basketball games.Studies show that Friday and Saturday night games average more than twice the fans of games on other days.The following information pertains to the stadium's normal operations per season:
$$\begin{array} { l r l } 
\text { Average fans per game (all games) } & 2500 \text { fans } \
\text { Average fans per Friday and Saturday night games } & 3500 \text { fans } \
\text { Number of home games per season } & 30 \text { games } \
\text { Stadium capacity } & 3500 \text { seats } \
\text { Variable operating costs per operating hour } & \$ 5000 & \
\text { Marketing costs per season for basketball } & \$ 238750 & \
\text { Customer-service costs per season for basketball } & \$ 75000 &
\end{array}$$
The stadium is open for five operating hours on each day a game is played.All employees work by the hour except for the administrators.A maximum of one game is played per day and each fan has only one ticket per game.
The stadium authority wants to charge more for games on Friday and Saturday.What is the minimum price that should be charged for peak attendance nights?

Quizplus · Accepted Answer

To find the minimum price for peak attendance nights, calculate the total costs and divide by the number of fans on peak nights. Total costs include variable operating costs (5 hours x $5000 x 30 games) and fixed costs (marketing and customer service). Divide this by the total number of fans on peak nights (3500 fans x number of peak games).

The Cronulla Sea Eagles Are Evaluating Ticket Prices for Basketball