Question

suppose you purchased 15 discounted tickets for an upcoming pop music concert. the tickets cost you $1,620.00 total. to purchase the tickets, you used money from your savings account. currently, the bank does not pay any interest on money in savings hope is to resell the tickets the day of the concert. if you sell the tickets outside the concert, you can sell them for $180.00 per ticket.a ticket scalper wants to corner the market, but to do that he needs your tickets. the scalper has offered to pay you $1,782.00 total for your the following questions, round your answers to two decimals.3rd attemptfeedbacksuppose you decide to sell the tickets to the scalper. your accounting profit from this transaction would be $ 162 . your economic profit would be $

Answer 1

To maximize total revenue from concert ticket sales, a band must consider the demand curve's elasticity; lowering prices can sometimes generate more revenue if demand is elastic. In a fixed-cost scenario, finding the optimal price is critical for maximizing profits. For reselling tickets, one must consider both accounting and economic profits, with economic profit factoring in the opportunity costs.

Step-by-step explanation:

When deciding whether to sell tickets at a higher price or more tickets at a lower price, the band must consider the demand curve and the concept of elasticity. Since the band faces a downward-sloping demand curve, raising ticket prices will result in fewer tickets sold. The goal is to maximize total revenue, which equates to higher profits since the costs are fixed. If demand for tickets is elastic, it implies that a decrease in price will lead to a proportionally larger increase in the quantity of tickets sold, potentially increasing total revenue. Conversely, if demand is inelastic, an increase in price may lead to a smaller decrease in quantity sold, which could also increase total revenue.

For the example of the raffle ticket, suppose we calculate the expected gain or loss. The expected value is the sum of all possible values each multiplied by their probabilities. The calculation would involve the total payout from each prize multiplied by the probability of winning that prize, subtracting the cost of the ticket. This provides an assessment of whether, on average, one would gain or lose money by participating in the raffle.

Moving to the scenario of reselling concert tickets, if you purchased 15 tickets at $108 each (total cost of $1,620) and the scalper offers $1,782 for these tickets, your accounting profit is the difference between the selling price and the purchase price, which is $162. However, the economic profit would have to account for the opportunity cost, which in this case is the foregone interest you could have earned if the money had remained in your savings account (if the account paid interest).