Unformatted text preview: price elasticity of demand? Will the stadium be full? MR = 0 e = – 1 yes f. A series of winning seasons caused the demand curve for football tickets to shift upwards. The new demand curve is q(p) = 300 000 – 10 000p. Ignoring the capacity constraint what price would generate maximum revenue? What quantity would be sold at this price? $15 150 000 seats g. Now considering the capacity constraint faced by the director, how many tickets should he sell and what is the price? 100 000 seats at $20 i. If he does this, what are the MR and the price elasticity of demand? MR = 10 and e = – 2 2. Write revenue as a function of quantity sold, and derive the marginal revenue. Analyse the relationship between marginal revenue and the elasticity of demand. See Varian pp. 278-79 or lecture 4 pp 14-16....
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This note was uploaded on 04/20/2010 for the course ECOS 2001 taught by Professor None during the One '09 term at University of Sydney.
- One '09