Question
The NBA All Star Game is coming to Indianapolis next January. You own a large vacant lot not too far from the stadium and have
The NBA All Star Game is coming to Indianapolis next January. You own a large vacant lot not too far from the stadium and have decided to freshen it up and sell parking spots for the big game. You plan on charging $155 per parking spot. For $155 they get to park and also get to enjoy a steak barbeque and hang out before the tip off. Patrons will reserve online and pay in advance. If a fan is unable to secure a ticket to the game, they will not utilize a parking spot either (but are not entitled to a refund). If a fan buys a spot and shows up after all the spots are full, you will refund their money and give them $50 toward parking at another location. This is all spelled out clearly on the registration form. You estimate that you can fit 250 cars in your lot. In talking with the league office you expect game capacity to be roughly 80% of the ticket demand. You use this number to figure out the likelihood that a purchaser of a parking spot will actually show up to park. Since your barbeque skills are world-reknowned, you can assume that you will be able to sell as many parking spots as you wish to put up for sale. Using Excel, based on your data table for the previous problem, what is the optimal number of parking spots to sell to maximize the expected profit?
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