Mary has been put in charge of a school function. She estimates that there is a fixed cost of $1020 for the site plus a cost of $4 per person that attends. If she charges $13 a ticket she can sell 300 tickets, but if she lowers the price to $6 she can sell 700 tickets. Assuming the demand price is linear, what price should she charge to break even while maximizing attendance?

Mary has been put in charge of a school function. She estimates that there is a fixed cost of $1020 for the site plus a cost of $4 per person that attends. If she charges $13 a ticket she can sell 300 tickets, but if she lowers the price to $6 she can sell 700 tickets. Assuming the demand price is linear, what price should she charge to break even while maximizing attendance?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 1.8CE

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