Sapling Learning no Suppose a Canyon Tour in the Grand Canyon costs Sunset Canyo

Question

Sapling Learning no Suppose a Canyon Tour in the Grand Canyon costs Sunset Canyons Tour Company $800 per run. Each Canyon Tour can hold 25 tourists, meaning that the cost per seat is $32.00 regardless of how many people are on board. Assume that Sunset Canyons Tour Company would like to maximize profits. 1. Sunset Canyons Tour Company charges $50.00 per ticket purchased in advance. If they sell 21 tickets in advance, how much revenue does the company generate? 2. What is Sunset Canyons Tour Company's profit on this tour? Number Number 3. Suppose that there are customers willing to pay 4. If it sells s no more than $20.00 to fill an empty seat the day of Sunset Canyons Tour Company's the tour (referred to as standby tickets). What is Sunset Canyons Tour Company's revenue if it sells 4 standby tickets for $20.00 each in addition to the advanced ticket sales? tandby tickets, what is profit? Number Number

Explanation / Answer

1. Sunset Canyons Tour Company charges $50.00 per ticket purchased in advance. If they sell 21 tickets in advance, how much revenue does the company generate?

Ans. Revenue = Number of tickets sold * Charges per ticket

= 21 * 50

= $1050

Revenue generated by company = $1050

2. What is Sunset Canyons Tour Company's profit on this tour?

Profit = Total Revenue - Total Cost

Total Revenue on this tour = $1050

Total cost on this tour = $800

So, Total Profit = 1050 - 800

= $250

So, Sunset Canyons Tour Company's profit on this tour = $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). What is Sunset Canyon's Tour Company's revenue ,if it sells 4 standby tickets for $20 each in addition to the advanced ticket sales?

Ans. Revenue = Number of tickets sold * Charges per ticket

= 21* 50 + 4 * 20

= $1050 + $ 80

= $1130

Sunset Canyons tour company's Revenue = $1130

4.If it sells standby tickets ,what is Sunset Canyons Tour Company's profit?

Profit = Total Revenue - Total Cost

= 1130 - 800

= $330

Sunset Canyons Tour Company's profit = $330

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