In the same football conference there is another university where the demand for football tickets at each game is 100,000 - 8,000p.If the capacity of the stadium at that university is 60,000 seats, what is the revenue-maximizing price for this university to charge per ticket?
A)$6.25
B)$5
C)$12.50
D)$3.13
E)$18.75

Question

Quizplus · Accepted Answer

To maximize revenue, set marginal revenue equal to zero. The demand function is Q = 100,000 - 8,000p. Revenue R = pQ = p(100,000 - 8,000p). Differentiate R with respect to p and set dR/dp = 0 to find the revenue-maximizing price. Solving gives p = $6.25.

In the Same Football Conference There Is Another University Where