Determining optimal price for film tickets

Determining optimal price for film tickets

A cinema is trying to determine the optimal price for their film tickets. Demand data provided by their consultant is shown below.
Price Quantity Demanded
$1 800
$2 600
$3 400
$4 200

Determining optimal price for film tickets

a) how much money should the cinema expect to make at a price of $2 per ticket, if it has a seating capacity of 800 seats?
b) how much money will they make if they want to ensure that all seats are taken so that there is neither a surplus nor a shortage?
c) The cinema is trying to buy a newly released blockbuster that will cause the quantity of tickets demanded at a price to double. What will the new equilibrium price be?
d) At what price should the new film be set for the cinema to maximize revenue?

 

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