1. Use the table below to predict what would happen if airlines and baseball stadiums priced all seats the same instead of using variable-pricing. What would happen to the number of tickets sold? What would happen to the total revenue from ticket sales? Assume stadiums are using variable-pricing and aren't completely sold out or completely empty. What would change if seats were sold at the lowest prices? Highest prices? Variable prices?
Table is set up like this:
More seats sold vs lowest prices
More seats sold vs highest prices
More seats sold vs variable prices
Less seats sold vs lowest prices
Less seats sold vs highest prices
Less seats sold vs variable prices
More revenue vs lowest prices
More revenue vs highest prices
More revenue vs variable prices
Less revenue vs lowest prices
Less revenue vs highest prices
Less revenue vs variable prices
To predict what would happen if airlines and baseball stadiums priced all seats the same instead of using variable-pricing, we can analyze the relationship between ticket prices and the number of seats sold, as well as the total revenue from ticket sales.
1. If seats were sold at the lowest prices, we can expect that more seats would be sold compared to variable pricing. This is because lower prices tend to attract more buyers and increase demand.
2. On the other hand, if seats were sold at the highest prices, we can expect that fewer seats would be sold compared to variable pricing. Higher prices generally reduce demand and limit the number of potential buyers.
3. Now, let's consider the scenario of variable prices. Typically, variable pricing adjusts ticket prices based on factors such as demand, seat location, and timing. With variable prices, the number of seats sold can vary depending on these factors. If there is high demand, certain tickets may be priced higher, resulting in fewer seats sold. Conversely, when there is lower demand, tickets may be offered at lower prices, increasing the number of seats sold.
Now, let's evaluate the impact on total revenue from ticket sales:
1. If seats were sold at the lowest prices, while more seats would be sold, the total revenue might not necessarily increase. Lower prices could result in reduced revenue per seat, potentially offsetting the gains from increased sales volume.
2. Conversely, if seats were sold at the highest prices, although fewer seats would be sold, the total revenue could potentially increase. Higher prices may compensate for the reduced sales volume, leading to higher revenue per seat.
3. In the case of variable prices, the total revenue would depend on the specific pricing strategies adopted. If the demand for certain seats warrants higher prices, revenue could increase. However, for seats with lower demand, ticket prices might be set lower, leading to a potential decrease in revenue per seat.
It's important to note that the actual impact on ticket sales and revenue will depend on various factors specific to each airline or stadium, including market conditions, customer preferences, and the overall value proposition.