Question

JUL JUL 15 Suppose a Whale-Watching Trip in Alaska costs Orca-Spotters Tours $800 per run. Each Whale-Watching Trip can hold 25 tourists, meaning that the cost per seat is $32.00 regardless of how many people are on board. Assume that Orca-Spotters Tours would like to maximize profits. at is Orca-Spotters Tours's profit on this tour? Orca-Spotters Tours charges $50.00 per ticket purchased in advance. If they sell 21 tickets in advance, how much revenue does the company generate? revenue: $ profit: $ If it sells standby tickets, what is Orca-Spotters Tours's profit? Suppose that there are customers willing to pay no more than $20.00 to fill an empty seat the day of the tour (referred to as standby tickets). What is Orca-Spotters Tours's revenue if it sells 4 standby tickets for $20.00 each in addition to the advanced ticket sales? revenue: $ profit: $

Answer 1

Answer:

1]

Orca-Spotters Tours charges $50.00 per ticket purchased in advance. If they sell 21 tickets in advance, So revenue the company generated is:

Revenue = Price x Quantity = $50 x 21 = $1050

2]

Orca-Spotters Tours's profit on this tour

Profit = revenue - Cost = $1050 - $800 = $250

3]

Suppose that there are customers willing to pay no more than $20.00 to fill an empty seat the day of the tour (referred to as standby tickets).

Orca-Spotters Tours's revenue if it sells 4 standby tickets for $20.00 each in addition to the advanced ticket sales is:

New revenue = $1050 + ($20 x 4) = $1050 + $80 = $1130

4]

If it sells standby tickets, Orca-Spotters Tours's profit is:

New profit = New revenue - Cost = $1130 - $800 = $330