12. The Vanier Cup, the finals of Canadian University football, was held on November 26, 2016at Tim Hortons Field in Hamilton, Ontario. The organizers learned a lot are already planningnext year's event! Based on what they learned this year, they know that the demand functionfor tickets to the game will be given by q = 200, 000 - 10, 000p, where p is the price chargedper ticket. The chief organizer for next year is an ambitious person who wants to set pricesso as to maximize revenue.(b)Write down an expression for the inverse demand function (price as a function ofquantity), total revenue (as a function of quantity), and marginal revenue (as a functionof quantity).Find the quantity and price that generate maximum revenue.(c) Derive an expression for the elasticity of ticket demand with respect to price. (Hint:your elasticity should be a function of the price, p.) What is the value of the elasticityat the revenue-maximizing price (your answer for price from part b)?

The demand function represents the quantity demanded by consumers at different price levels.Total…

12. The Vanier Cup, the finals of Canadian University football, was held on November 26, 2016 at Tim Hortons Field in Hamilton, Ontario. The organizers learned a lot are already planning next year's event! Based on what they learned this year, they know that the demand function for tickets to the game will be given by q = 200, 000 – 10, 000p, where p is the price charged per ticket. The chief organizer for next year is an ambitious person who wants to set prices so as to maximize revenue. (a) Write down an expression for the inverse demand function (price as a function of quantity), total revenue (as a function of quantity), and marginal revenue (as a function of quantity). (b) Find the quantity and price that generate maximum revenue. Derive an expression for the elasticity of ticket demand with respect to price. (Hint: your elasticity should be a function of the price, p.) What is the value of the elasticity at the revenue-maximizing price (your answer for price from part b)?

12. The Vanier Cup, the finals of Canadian University football, was held on November 26, 2016 at Tim Hortons Field in Hamilton, Ontario. The organizers learned a lot are already planning next year's event! Based on what they learned this year, they know that the demand function for tickets to the game will be given by q = 200, 000 – 10, 000p, where p is the price charged per ticket. The chief organizer for next year is an ambitious person who wants to set prices so as to maximize revenue. (a) Write down an expression for the inverse demand function (price as a function of quantity), total revenue (as a function of quantity), and marginal revenue (as a function of quantity). (b) Find the quantity and price that generate maximum revenue. Derive an expression for the elasticity of ticket demand with respect to price. (Hint: your elasticity should be a function of the price, p.) What is the value of the elasticity at the revenue-maximizing price (your answer for price from part b)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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