Econ

The director of a theater company in a small college town is considering changing the way he termss slates. He has hired an economic consulting loyal to estimate the demand for tickets. The unwaveringly has classified people who go the theater into two classifys, and has yield back up with two demand functions. The demand curves for the frequent semipublic (QG) and students (QS) are given below: QG=500-5P QS=cc-4P a. If the authentic price of tickets is $35, strike the measure demanded by from each one group. QG= 500 5(35) = 325 tickets QS= 200 4(35) = 60 tickets. b. Find the price expansibleity of demand for each group at the occurrent price and quantity. EG= -5(35/325) = -0.54 ES= -4(35/60) = -2.33 c. Is taxation maximised when $35 is charged for each and every ticket? why or why not? No, the revenue is not maximised because neither of the work out elasticities is equal to 1. d. Should the price for the general public b e channel magnitude or reductiond to maximise profits? Why? The general publics demand is inelastic at the current price. So the price should affix for the general public, and the quantity demanded would decrease by a smaller percentage, but the revenue ascertain out increase. e.

Should the director increase or decrease the price for the students to maximize profits? Why? The students demand is elastic at the current price. So the price should decrease, the quantity demanded would increase in a higher percentage, and thus the revenue leave alone increase. f. What price should he charge the general public to maximize revenue from ticket gross sales? [Hint: Use the formu la for elasticity, bent it equal to 1, and ! knead for price and quantity] -5P/Q = -1___________________________________________________________________ Q = 5P = 500-5P___ P=50, Q=250_________________________________________________________ g. What price should he charge the students to maximize revenue collected from ticket sales? [Hint: Use...If you want to get a full essay, order it on our website: OrderEssay.net

If you want to get a full information about our service, visit our page: write my essay