Suppose the Carrow Road stadium has a capacity of 50,000 seats and is used for seven games a year. Three are Premiership games, with a demand for tickets (expressed in thousands) given by D = 150 − 3p per game, where p is the ticket price. Three of the other games are East Anglia friendly matches with demand D = 90 − 3p per game. Finally, one is a Champion’s League game with a demand D = 240 − 3p. The costs of operating the stadium are independent of the number of tickets sold. (a) Determine the optimal ticket price for each game, assuming the objective is profit maximization. (b) Given that the stadium is frequently full, the idea of
Suppose the Carrow Road stadium has a capacity of 50,000 seats and is used for seven
games a year. Three are Premiership games, with a
given by D = 150 − 3p per game, where p is the ticket price. Three of the other games are East
Anglia friendly matches with demand D = 90 − 3p per game. Finally, one is a Champion’s League
game with a demand D = 240 − 3p. The costs of operating the stadium are independent of the
number of tickets sold.
(a) Determine the optimal ticket price for each game, assuming the objective is profit maximization.
(b) Given that the stadium is frequently full, the idea of expanding the stadium has arisen. A
preliminary study suggests that the cost of capacity expansion would be £100 per seat per year.
Would you recommend that the football club goes ahead with the project of capacity expansion?
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