03 Jun Question 5.) On the topic of ticket pricing:
Question
5.) On the topic of ticket pricing:
Consider a football franchise with 10 home games and two types of tickets (high quality and low quality) facing consumers of two types as described below:
* Type A consumers value low quality tickets at $1,500 for the entire season, and value high quality tickets at $2,000 for the entire season.
* Type B consumers value low quality tickets at $2,000 for the entire season, and value high quality tickets at $4,500.
The owner plans to set the pricing such that consumers voluntarily sort into their preferred seats while allowing the franchise to extract as much consumer surplus as possible (as additional revenue). Advise the owner of the franchise as to how she should set the price of high and low quality tickets.
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