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Your are the owner-manager of a small 200-seat theater for shows in downtown Chicago. The usual ticket price for the evening 90-minute show is $17,
Your are the owner-manager of a small 200-seat theater for shows in downtown Chicago. The usual ticket price for the evening 90-minute show is $17, and this usually fills up about 65% of the capacity. You suggest experimenting with a discounted price of $13 for a while, and this improves attendance to about 85% of theater capacity. Marginal cost of each patron attending the show is zero. Assuming demand is linear, and assuming all other demand related factors remained unchanged during the price experiment (and are expected to remain unchanged over the rest of the season), in order to maximize profits from ticket sales, you could advise that the optimal price is likely to be
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