Question

given the information presented in the previous table, the fixed cost to operate this flight is $30,000. at each ticket price, a different number of consumers will be willing to purchase tickets for this flight. assume that the price of a flight is fixed for the duration of ticket sales. use the previous table as well as the following demand schedule to complete the questions that follow. quantity demanded (tickets per flight) 100 70 50 0 price (dollars per ticket) 100 300 700 900 complete the following table by computing total revenue, total cost, variable cost, and profit for each of the prices listed (hint: be sure to enter a minus sign before the number if the numeric value of an entry is negative.) price (dollars per ticket) 100 300 700 900 total revenue (tr) (dollars) total cost (tc) (dollars) 30,000 variable cost (vc) (dollars) 0 profit (tr - tc) (dollars) -30,000 given this information, the profit - maximizing price is per ticket, and seats out of 100 will be purchased. number of passengers (dollars per flight) 100 90 80 70 60 50 40 30 20 10 0 59,500 59,300 59,000 58,500 58,000 57,000 55,000 53,000 50,000 45,000 30,000

Explanation:

Step1: Recall revenue formula

$TR = P\times Q$, where $P$ is price per - ticket and $Q$ is quantity demanded.
When $P = 100$, $Q = 100$, then $TR=100\times100 = 10000$.
When $P = 300$, $Q = 70$, then $TR = 300\times70=21000$.
When $P = 700$, $Q = 50$, then $TR=700\times50 = 35000$.
When $P = 900$, $Q = 0$, then $TR=900\times0=0$.

Step2: Recall total - cost formula

$TC=FC + VC$. Given $FC = 30000$ and $VC = 0$, so $TC = 30000$ for all cases.

Step3: Recall profit formula

$\text{Profit}=TR - TC$.
When $TR = 10000$, $\text{Profit}=10000 - 30000=-20000$.
When $TR = 21000$, $\text{Profit}=21000 - 30000=-9000$.
When $TR = 35000$, $\text{Profit}=35000 - 30000 = 5000$.
When $TR = 0$, $\text{Profit}=0 - 30000=-30000$.

Answer:

Price (Dollars per ticket)	Quantity Demanded (Tickets per flight)	Total Revenue (TR) (Dollars)	Total Cost (TC) (Dollars)	Variable Cost (VC) (Dollars)	Profit (TR - TC) (Dollars)
300	70	21000	30000	0	- 9000
700	50	35000	30000	0	5000
900	0	0	30000	0	- 30000

The profit - maximizing price is 700 dollars per ticket.