In the same football conference there 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?
A)$3.75
B)$1.88
C)$7.50
D)$2.50
E)$11.25

Question

Quizplus · Accepted Answer

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

In the Same Football Conference There Is Another University Where