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4. In a town of 120,000 potential “football fans,” the football team draws the f

ID: 1168210 • Letter: 4

Question

4. In a town of 120,000 potential “football fans,” the football team draws the following attendees per game, at the various prices shown:

P

Q (in thousands)

Q (male) (1’000s)

Q (female) (1’000s)

Revenue (1’000s)

0

120

60

60

0

10

90

50

40

900

20

60

40

20

1200

30

30

30

0

900

Q. If the team can charge ANY prices it wants (including different prices to men and women), what price(s) should it charge to make the largest amount of revenue?

P

Q (in thousands)

Q (male) (1’000s)

Q (female) (1’000s)

Revenue (1’000s)

0

120

60

60

0

10

90

50

40

900

20

60

40

20

1200

30

30

30

0

900

Explanation / Answer

It can charge any price of $10 or $20 for the females as it will produce the same amount of revenue that is $400. And for the male it can charge $30 as it gives the maximum revenue of $900.

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