# Economics

Problem 2: You are a rock concert producer planning a rock concert. The demand schedule for tickets is P = 75 -0.005X where X is the number of people attending the concert. The marginal revenue function is MR = 75-0.01X.

The fixed cost of putting on the concert is \$150,000. The marginal cost per person attending is zero. The capacity of the concert hall is 5,000. What price should you charge to maximize profits? How many people will attend the concert and what is the value of your profit or loss? What price should you charge to maximize attendance?

Set MR = MC... in this case 75 - .01x = 0. You'll find the profit-maximizing quantity to be 7500 and the profit-maximizing price to be \$37.50. However, there aren't 7500 seats available; there are only 5000. Therefore, substitute 5000 for X in the original inverse demand function. This will yeild P = 50. This is the profit-maximizing price with a quantity of 5000. The rest should fall in place. Be sure you agree with my work as I'm only a grad student!!!

Do you not Multiple the .01 by 2
MR=75-.02x

No, MR = a + 2bQ or 75 + 2(-0.005X) which gives you MR = 75 + .001X. I think you're on the right track though b/c you multiply the original inverse demand function (-0.005X) by 2 to get MR...

1. 👍 0
2. 👎 0
3. 👁 146

## Similar Questions

1. ### English

In which sentence is the underlined verb in the passive voice? a. The rock group is giving the concert just one more time. b. By then the rock group was already giving the concert. c.The rock group will have given the concert by

asked by Samii on November 30, 2015
2. ### English

posted by rfvv Thursday, April 5, 2018 at 6:01am 1. The concert is over. 2. The concert is finished. 3. The concert ended. 4. The concert finished. [Are they the same in meaning? Can we use all the sentences? Which ones are

asked by rfvv on April 16, 2018
3. ### PreCalculas

The psychological sensation of loudness B is measured in decibels and is defined with reference to the intensity, , of a barely audible sound by the following equation. In this equation, I is the intensity of the sound in

asked by Ryan on November 30, 2015
4. ### Music

I have a few questions about the circle of forths. Alright so the circle goes C,F,B-Flat,E-Flat,A-Flat,D-Flat,G-Flat,B,E,A,D,G and then returns to C and continues to go around in the same order. I play the Bari Sax. I am in grade

asked by Emily on September 17, 2006
5. ### music

Anyone been to an concert (jazz, opera, etc.)and had to do a concert report? i need a concert report can someone please help me, i don't really have the money or the time to go to a concert and i need to summit a concert report in

asked by Fulano on May 12, 2014
6. ### Physics

Example 1: (Rock A) is thrown against a larger stationary rock(Rock B). considering the following possibilities... 1. Rock A bounces off of Rock B 2. Rock A splits into two pieces off of Rock B 3. Rock A explodes into many pieces

asked by Cole on November 8, 2013
7. ### Math

The 8th grade class is taking a field trip to a concert. Your bus averages 40 mph in the heavy traffic driving to the concert and 60 mph returning home. The total travel time is 2.5 hours. How far away is the concert? How long did

8. ### English

1. The concert is over. 2. The concert is finished. 3. The concert ended. 4. The concert finished. [Are they the same in meaning? Can we use all the sentences? Which ones are unacceptable? Do you have some more similar

asked by rfvv on April 5, 2018
9. ### English

1. The concert is over. 2. The convert is finished. 3. The concert is ended. 4. The concert is completed. 5. The concert is done. 6. The concert finished. 7. The concert ended. 8. The concert completed.

asked by rfvv on April 22, 2019
10. ### Earth Science

1. In the classroom during a visual inspection of a rock, a student recorded four statements about the rock. Which statement about the rock is an observation? (1)The rock formed deep in Earthâ€™s interior. (2)The rock cooled

asked by Anonymous on June 18, 2008

More Similar Questions