on this Title Bar to insert am Password Words o Path: p QUESTION 5 Adriana is in
ID: 1155568 • Letter: O
Question
on this Title Bar to insert am Password Words o Path: p QUESTION 5 Adriana is in charge of setting the price on basketball tickets for the local team's home games From previous experience, she has estimated demand to be P 60-0.00250 where P represents price in dollars per seat, and Q represents seats that could be sold per game. The seating capacity is 20.000 seats. Determine the number of tickets that would be sold at a ticket price of $15 each Also, determine the consumer surplus at this priceExplanation / Answer
Demand function is as follows -
P = 60 - 0.0025Q
P = $15
15 = 60 - 0.0025Q
0.0025Q = 45
Q = 45/0.0025 = 18,000
The number of tickets that would be sold at a ticket price of $15 each is 18,000 tickets.
calculate price when Q is zero -
P = 60 - 0.0025Q = 60 - (0.0025 * 0) = 60
Calculate the consumer surplus when price of ticket is $15 -
Consumer surplus = 1/2 * (Price when Q is zero - Current price of ticket) * tickets sold
Consumer surplus = 1/2 * (60 - 15) * 18,000 = $405,000
The consumer surplus at this price is $405,000.
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