A city is planning to bid to host a sports event

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A city is planning to bid to host a sports event. It believed the demand curve for the event in its city is P = 1,000 - Q and the marginal cost would be constant at $200. The sports organization that is soliciting bids from potential host cities requires that cities provide a facility with seating capacity of 900 and charge a price of $600. Given the predicted local demand for this event, the expected marginal cost and the "all or nothing" power of the sports organization, explain whether it would be rational for this city to bid to host this event.

Reference no: EM13938728

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