Answer:
price should decease by 31% to $27.60 per ticket and total revenue = $75,6666.78
Explanation:
total revenue at original price = $40 x 1500 = $60,000
the price elasticity of demand = [(1100 - 1500) / 1500] / [($44 - $40) / $40] = -26.7% / 10% = -2.67 or |2.67| in absolute terms which means that the demand is very elastic.
since the PED is very elastic, the price should decrease
If price decreases by 10%, attendance will increase by 26.7%, so total revenue = $36 x (1500 x 1.267) = $36 x 1900 = $68,400
If price decreases by 20%, attendance will increase by 53.4%, so total revenue = $32 x (1500 x 1.534) = $32 x 2301 = $73,632
If price decreases by 30%, attendance will increase by 80.1%, so total revenue = $28 x (1500 x 1.801) = $28 x 2701 = $75,628
If price decreases by 40%, attendance will increase by 106.8%, so total revenue = $24 x (1500 x 2.068) = $28 x 2701 = $74,448
the price should decrease more than 30%, but less than 40%
If price decreases by 35%, attendance will increase by 93.45%, so total revenue = $26 x (1500 x 1.9345) = $28 x 2902 = $75,452
If price decreases by 33%, attendance will increase by 88.11%, so total revenue = $26.80 x (1500 x 1.8811) = $28 x 2822 = $75,629.60
If price decreases by 32%, attendance will increase by 85.44%, so total revenue = $27.20 x (1500 x 1.8544) = $28 x 2822 = $75,659.52
If price decreases by 31%, attendance will increase by 82.77%, so total revenue = $27.60 x (1500 x 1.8277) = $28 x 2822 = $75,6666.78