3. If concert seats are priced at $75 each, demand is expected to fill 820 of a 1000 seat auditorium. The variable cost per seat is $10. Using yield management, the price structure has been redone so advance tickets are $65 or $100 at the door. Average advance ticket demand at the new price is expected to be 650, and at-the-door demand is forecasted at 220 tickets. Which is a better option in this example-traditional pricing or using yield management?
Expert Answer
A) Yield management method:-
*Advance tickets – 650
Rate per ticket – $ 65 per ticket
Total collection = 65×650
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