What price should he charge each group if he wants to maximize revenue collected from ticket sales?

The director of a theatre company in a small college town is considering charging the way he prices Show more The director of a theatre company in a small college town is considering charging the way he prices tickets. He has hired an economic consulting firm to estimate the demand for tickets. The firm has classified people who go to the theatre in to two groups and has come up with two demand functions. The demand curves for the general public and students are given below: General Public: Q GP = 500 5p Students: Q S = 200 4p The tickets are currently sold at $35. a) Find the price elasticity of demand for each group at the current price. b) Is the director maximizing the revenue he collects from ticket sales by charging $35 to both groups? Explain. c) What price should he charge each group if he wants to maximize revenue collected from ticket sales? Show less

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