Question

Maximizing Revenue A chartered bus company has the following price structure. A single bus ticket costs $30. For each additional ticket sold to a group of travelers, the price per ticket is reduced by $0.50. The reduced price applies to all the tickets sold to the group.

Calculate the total cost for one, two, and five tickets.

Answer 1

The total cost for one ticket is $30, for two tickets it's $59, and for five tickets, the total cost is $140. With each additional ticket purchased, a discount of $0.50 is applied to all tickets in the group.

Step-by-step explanation:

To solve the problem of maximizing revenue for the chartered bus company using the given price structure, we can calculate the total cost for purchasing different numbers of tickets. First, let's establish the base cost for one ticket and the discount per additional ticket sold:

Base price of one ticket: $30

Discount per additional ticket: $0.50

Now, we calculate the total cost for one, two, and five tickets as follows:

One ticket: No discount is applied, so the total cost is $30.

Two tickets: Each ticket gets a $0.50 discount, making them $29.50 each. Thus, the total cost is 2 x $29.50 = $59.

Five tickets: Each ticket gets a $0.50 discount for each additional ticket, so 4 additional tickets means a $2 discount per ticket, making them $28 each. The total cost is 5 x $28 = $140.

Note that for each additional ticket beyond the first, the discount applies to all tickets purchased, not just the additional ones. This scenario demonstrates a volumetric pricing strategy that encourages the purchase of more tickets by reducing the per-ticket price.