Refer to Scenario 10.4. Given the information above, what are the profit maximizing number of tickets sold and the price of tickets?

A) 0, $60
B) 20,000, $50
C) 40,000, $40
D) 60,000, $30
E) 80,000, $20

Question

Cristina Olivo · Accepted Answer

Final Answer : D, Explanation :  To maximize profit, we need to find the quantity where marginal revenue equals marginal cost. Since marginal cost is zero up to 60,000 fans and infinite beyond that point, we only need to consider quantities up to 60,000.First, we can find the equation for marginal cost up to 60,000 fans:MC = 0Setting MR = MC:60 - .001Q = 0.001Q = 60Q = 60,000Now we can find the price that corresponds to this quantity using the demand equation:Q = 120,000 - 2,000P60,000 = 120,000 - 2,000P2,000P = 60,000P = $30Therefore, the profit maximizing number of tickets sold is 60,000 and the price of tickets is $30.

Refer to Scenario 10.4. Given the information above, what are the profit maximizing number of tickets sold and the price of tickets?

A) 0, $60
B) 20,000, $50
C) 40,000, $40
D) 60,000, $30
E) 80,000, $20

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Learning Objectives

Related questions

Refer to Scenario 10.4. Given the information above, what are the profit maximizing number of tickets sold and the price of tickets?A) 0, $60B) 20,000, $50C) 40,000, $40D) 60,000, $30E) 80,000, $20

Definitions

Learning Objectives

Learning Objectives

Related questions

Refer to Scenario 10.4. Given the information above, what are the profit maximizing number of tickets sold and the price of tickets?

A) 0, $60
B) 20,000, $50
C) 40,000, $40
D) 60,000, $30
E) 80,000, $20