In the same football conference there is another university where the demand for football tickets at each game is 160,000 - 12,000p.If the capacity of the stadium at that university is 90,000 seats, what is the revenue-maximizing price for this university to charge per ticket?
A)$6.67
B)$13.33
C)$5.83
D)$3.33
E)$20

Question

In the same football conference there is  another university where the demand for football tickets at each game is 160,000 - 12,000p.If the capacity of the stadium at that university is 90,000 seats, what is the revenue-maximizing price for this university to charge per ticket?
A)$6.67
B)$13.33
C)$5.83
D)$3.33
E)$20

Quizplus · Accepted Answer

To maximize revenue, set marginal revenue equal to zero. The demand function is Q = 160,000 - 12,000p. Revenue R = pQ = p(160,000 - 12,000p). Differentiate R with respect to p and set the derivative equal to zero to find the price. Solving gives p = $6.67.

In the Same Football Conference There Is Another University