The demand for tickets to the Katy Perry concert (Q) is given as follows: Q = 120,000 - 2,000P

The marginal revenue is given as: MR = 60 - 0.001Q

The stadium at which the concert is planned holds 60,000 people. The marginal cost of each additional concert goer is essentially zero up to 60,000 fans, but becomes infinite beyond that point.

a) Given the information above, what are the profit maximizing number of tickets sold and the price of tickets? (10 marks)

b) Suppose that the municipal stadium authority imposes a tax of $10 per ticket on the concert promoters. Given the information above, how much the profit maximizing ticket price will increase?