Question
You are the revenue manager for the UCF athletic department. The ticket sale model that is used to price UCF football tickets is a dynamic
You are the revenue manager for the UCF athletic department. The ticket sale model that is used to price UCF football tickets is a dynamic pricing model, which means ticket prices adjust to supply and demand.
Your group ticket manager contacts you and says that he has a large group that is requesting a group rate for 50 tickets for 3 games (150 total).
Traditionally, the tickets that the group is requesting would sell for
$100 each. You know that you could sell 70 tickets but cannot be sure about the other 80 seats.This means that the displaced contribution would have be $5,600 (70 x $80).The group will make other revenue contributions by spending $1,500 in concessions. Thus, making the total displacement contribution needed $4,100.The variable cost on each ticket is $20.What is the minimum price you could sell these tickets for?
Contribution Margin = Ticket price - Variable costs
a) $27.33
b) None of these answers are correct
c) $10.99
d) $100
e) $50.01
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