0 12/12/2017 11:30 PM 5.6/100 O 11/28/2017 07:26 PM Gradebook Question 2 of 12 M
ID: 1115192 • Letter: 0
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0 12/12/2017 11:30 PM 5.6/100 O 11/28/2017 07:26 PM Gradebook Question 2 of 12 Map Sapling Learning Suppose that your college sells tickets to a popular sport. Everyone likes tickets to big games more thantickets to games where your team is likely to win by a large margin (here called a big win). There are still two groups of people with different preferences, however. The first group likes big games more than does the second group while the second group likes big wins more than does the first one. For simplicity, we'll assume there is one game of each type per year and 1,000 people in each group. The table below shows the willingness-to-pay of the two pes of people for the two types of tickets. Use this information to answer the following two questions. Assume at your college wants to maximize its ticket revenue and cannot tell which people fall into each category. The stadium is large enough to accommodate up to 2,000 people People who like big games People who like big wins Tickets to big games S55 Tickets to big wins S15 $45 $25 Number How much ticket revenue can your college collect each year if it sells the tickets individually? Number How much ticket revenue can your college collect each year if it bundles the tickets and can prevent resale? Previous O Check Answer Next Exit HintExplanation / Answer
Answer to first box : 120,000
See that if the price is set equal to $45 for big games and $15 for big wins, the revenue is maximized because there are 2000 people for buying tickets. Revenue is (45 + 15) x 2000 = 120,000
Answer to second box : 140,000
Bundled priced is sum of willingness of that group which is lower. Here it is $55 + $15 = 70 as well as $45 + $25 = $70. Now this implies the revenue is $70 x 2000 = 140,000.
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