Assuming that the data contains a representative sample of Zach$$s

Garage customer base, what price level would maximize expected

revenues $($profits$)?$ Assume that the average attendance is now

about $250$ per night, with an average of $12$ events per month,

would that optimal price be sufficient to cover Zach's costs of

$$3,000$ per month?

Tip: to compute total expected revenues, use the formula TOTAL

MARKET $$ EXPECTED REVENUES, or use the alternative formula TOTAL

MARKET $$ LIKELIHOOD OF PURCHASE $$ PRICE.

Question $2$

Assuming that attendance is currently around $250$ per event, at

what price level would that attendance decrease to an average of

$125?$ That is$,$ at what price would half the attendees stop coming

because of the entrance fee?

Question $3$

Looking at the figure $"($expected$)$ Revenues", at what price level

would Zach exactly cover his monthly costs?

Question $4($advanced$)$

Zach does not want to lose the youngest customers, who are often

students. Assuming that he does not charge an entrance fee to

people $21$ or younger, what would be the optimal pricing strategy

to maximize revenues? What would be the total attendance at that

price level?

Tip: Sort respondents by age and apply the pricing model on those

customers $22$ years of age or more only. Assume that younger

customers $($who pay no entrance fee$)$ will not to be impacted by pricing

decision $($though this is a questionable assumption$).$

Tip: When extrapolating your results to compute total profit, note that

a portion of the total expected market will pay no entrance fee. Assume

that $1/3$ of the attendees are $21$ years old or younger.

Question $5($advanced$)$

Assume that instead of allowing the youngest customers to

attend for free, Zach decides instead to charge a lower price by

offering a discount. What is the price that would maximize profit

for the younger segment of the population? How much

additional profit would that bring in$?$ Compare that figure to the

one you obtained for Question $1$ and explain the differences.

What would be the impact on attendance? Would you

recommend such strategy to Zach? Answer these questions and explain the pricing survey $($in the pdf$)$ and research articles to support the answers we found to the questions and give recommended changes.