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Title: Taylor Stadium is evaluating ticket prices for its baseball games. Studies have shown that Monday ... Post by: dxpayne on Nov 7, 2017 Taylor Stadium is evaluating ticket prices for its baseball games. Studies have shown that Monday and Tuesday ball games average less than half the fans of games on other days. The following information pertains to the stadium's normal operations per season.
Average fans per game 5,000 fans Average fans per Monday/Tuesday game 2,000 fans Stadium operating hours per season for baseball 300 hours Stadium capacity 7,000 seats Variable operating costs per hour $2,000 Fixed overhead costs per year for all events $450,000 Marketing costs per season for baseball $212,500 Customer service costs per season for baseball $25,000 The stadium is open for 5 hours on each day a game is played. The stadium is available for some type of use 300 days a year. All employees work by the hour except for the administrators. In addition, only one game is played per day and each fan would have only one ticket per game. Required: What is the unit cost when establishing a long-run price for ball games assuming all tickets are priced the same? Title: Re: Taylor Stadium is evaluating ticket prices for its baseball games. Studies have shown that ... Post by: Munihasen on Nov 7, 2017 Games = 300 hrs./5 hrs. per game = 60 games
Attendance = 60 × 5,000 = 300,000 fans Percent use per year for baseball 60/300 = 0.20 Variable costs 300 × $2,000 $600,000 Fixed $450,000 × 0.20 90,000 Marketing 212,500 Customer service 25,000 Total $927,500 Average cost per fan = $927,500/300,000 = $3.09 |