The demand for seats per game, at a local stadium that seats a maximum of 40 million per game, is P = 22 – 0.2Q where P is the price of a ticket and Q represents the number of seats (expressed in millions). Assume that all seats and all games are the same, and marginal cost = $10 = average cost.
I. If the owner of the local stadium chooses a uniform per-ticket price, calculate the maximum profit per game.
II. If the per-ticket price must match the marginal cost, calculate the consumer surplus per game.
- I have arrived at conclusions of both 90 & 320.... need clarification of which is correct.
III. Should the answers to I and II be expressed in millions? Explain
