Reference no: EM133016331

Question - You are the revenue manager for the UCF athletic department. The ticket sale model that is used to price UCF football tickets is a dynamic pricing model, which means ticket prices adjust to supply and demand.

Your group ticket manager contacts you and says that he has a large group that is requesting a group rate for 50 tickets for 3 games (150 total).

Traditionally, the tickets that the group is requesting would sell for $100 each. You know that you could sell 70 tickets but cannot be sure about the other 80 seats. This means that the displaced contribution would have be $5,600 (70 x $80). The group will make other revenue contributions by spending $1,500 in concessions. Thus, making the total displacement contribution needed $4,100. The variable cost on each ticket is $20. What is the minimum price you could sell these tickets for?

Contribution Margin = Ticket price - Variable costs

a) $27.33

b) None of these answers are correct

c) $10.99

d) $100

e) $50.01