Question

A rock star intentionally sets her ticket prices below what would be necessary to sell out her shows. how might this be justified by a manager whose goal is to maximize long-term profit?

Answer 1

The rock star's manager may justify setting ticket prices below what is necessary to sell out shows as a strategy to maximize long-term profit by considering the concept of price elasticity of demand.

Step-by-step explanation:

The rock star's manager may justify setting ticket prices below what is necessary to sell out shows as a strategy to maximize long-term profit by considering the concept of price elasticity of demand. Price elasticity of demand measures how responsive the quantity of a product demanded is to a change in its price. If demand for the rock star's shows is highly elastic, meaning that a small change in price leads to a large change in demand, then setting lower ticket prices may attract more fans and increase overall revenue by encouraging them to spend more on other items like recordings and merchandise. By adopting this strategy, the manager seeks to prioritize building a loyal fan base that will continue to support the rock star's career over the long term.

Answer 2

the answer to this question is: The revenue sacrificed represents a very small share of the show's revenue
The only way the show can still earn profit by selling cheap tickets is if they're gaining additional revenue from another streatm of income, such as selling merchandise on the concerts, providing beer and snacks, or selling autograph and photos