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A basketball team knows that it can sell all 1,000 seats in its arena for a price of $15, but determines that if it sells tickets for $20 then it will only sell 90% of the seats. By what percentage will the team increase its revenue if it decides to sell tickets for the higher price?​

User Fortunato
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Answer:

To solve this problem, we need to calculate the revenue generated by selling tickets at each price point, and then compare the two values.

At $15 per ticket, the team can sell all 1,000 seats, generating a total revenue of:

Revenue = Price x Quantity = $15 x 1,000 = $15,000

At $20 per ticket, the team will only sell 90% of the seats, or 0.9 x 1,000 = 900 seats. The total revenue generated at this price point will be:

Revenue = Price x Quantity = $20 x 900 = $18,000

Therefore, the team will generate $18,000 in revenue if it sells tickets for $20, compared to $15,000 if it sells tickets for $15.

To calculate the percentage increase in revenue, we can use the following formula:

% increase = (new value - old value) / old value x 100%

Plugging in the values, we get:

% increase = ($18,000 - $15,000) / $15,000 x 100% = 20%

Therefore, the team will increase its revenue by 20% if it decides to sell tickets for $20.

User Rumple Stiltskin
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