Let us return to the Stanford Stadium pricing problem in Section 7.4, assuming a capacity of 60,000 seats and the price-response functions for students and for the general public as given in Equations 7.1 and 7.2. Assume that 5% of the general public will masquerade as students (perhaps using borrowed ID cards) to save money. Assuming Stanford knows that, what are the optimal prices for student tickets and general public tickets it should set in this case? What is the total revenue,

and how does it compare to the case without cannibalization? What does this say about the amount that Stanford would be willing to pay for such devices as photo ID cards in order to eliminate cannibalization?