Question

Scenario 15-6: The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die-hard fans and casual fans. For a particular WeR2Loud concert, there are 1,000 die-hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50,000, which includes the cost of the band, lighting, security, etc.
Refer to Scenario 15-6. How much profit will the concert promoters earn if they set the price of each ticket at $50?
A. $25,000
B. $75,000
C. $100,000
D. $150,000

Answer 1

Answer:

If they set the price of each ticket at $50, the profit of the promoters will be of  $25,000

Explanation:

Earnings:

1,500 seats sold (1,000 die-hard fans + 500 casual fans) x $50 for ticket = $75,000

Costs: $50,000 (band, lighting, security, etc.)

Profit:  $75,000 - $50,000 = $25,000