Ron, the director at the Annenberg Theater, is planning his pricing strategy for a musical to be held in a 500-seat thea

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Ron The Director At The Annenberg Theater Is Planning His Pricing Strategy For A Musical To Be Held In A 500 Seat Thea 1 (39.31 KiB) Viewed 32 times

Ron, the director at the Annenberg Theater, is planning his pricing strategy for a musical to be held in a 500-seat theater. He sets the full price at $120 and estimates demand at this price to be normally distributed with mean 300 and standard deviation of 100. Ron also decides to offer student-only advance sale tickets discounted 75% off the full price. Demand for the discounted student-only tickets is usually abundant and occurs well before full price ticket sales. a. Suppose Ron sets a 320-seat booking limit for the student-only tickets. What is the number of full-price tickets that Ron expects to sell? b. Compute the expected Total Revenue for Ron considering the arrangement in part a. C. Based on a review of the show in another city, Ron updates his demand forecast for full-price tickets to be normal with mean of 200 and standard deviation of 50, but he does not change the ticket prices. What is the optimal protection level for full-price seats?