You run a concert venue called the Red Herring that has capa…
You run a concert venue called the Red Herring that has capacity for 200. You have booked three different bands for three different upcoming dates. For simplicity the bands are called the Onesies, the Twosies, and the Threesies. These bands differ in popularity, so the demand curves for the tickets to their shows are different. Demand for Onesies Tickets is governed by P = 100 – Q. Twosies demand is given by P = 150 – Q Threesies demand is given by P = 200 – Q. The cost structure for each show is as follows. You need to pay each of the bands a flat fee to play, and you incur no additional costs as additional people come to their respective concerts. Flat fees: Onesies $2,000, Twosies: $4,000, Threesies: $6,000. Suppose you can charge different prices for the different concerts. Find the profit maximizing prices, associated quantities for each show, and total profits when you book all three bands. When you can charge different prices for the different concerts, what is the profit-maximizing Onesies ticket price?
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