Ticket price and discount for a profit target

Ticket price and discount for a profit target

IP 2
10 marks

A drama club hires a hall with \(120\) seats for one night. The hire charge is \(\$450\), and every ticket sold costs the club a further \(\$3.50\) for programmes and refreshments. Tickets are sold at \(\$12\) each.

  1. Find the least number of tickets the club must sell to make a profit of at least \(\$300\).[3]
  2. The club decides to give a discount of \(\$d\) on every ticket. Find the greatest value of \(d\) for which a full hall still gives a profit of at least \(\$300\).[3]
  3. With the discount in (b), find the least number of tickets that must be sold to reach the target. Comment on how sensible this discount is.[2]
  4. State one assumption about the club's costs or sales in this model, and check whether your answer to (a) is realistic for this hall.[2]

Solution:

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Answer:(a) \(89\) (b) \(d=2.25\) (c) \(120\) tickets, i.e. a full hall: the target is missed if even one seat is unsold (d) Fixed costs and full-price sales assumed; \(89\le120\), about \(74\%\) of seats

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