Business decisions
Art museum
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The municipal art museum has suffered from large budget deficits
in the last years.
Museum management is considering a change in the price of the
entrance tickets (now $5) to increase revenues.
To this end, a poll was conducted to examine the people's interest in visiting
the museum. It turned out that there was
a significant difference between young and old people.
Below are estimates of the daily number of visitors, depending
on ticket prices, in the two age groups.
| number of visitors |
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f - Visitors under the age of 25
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g - Visitors over the age of 25
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ticket price (in dollars)
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(The dots represent the current nomber of visitors,
at the $5 per ticket price level).
Several ideas were floated at the museum's board meeting:
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Set a new price for tickets, so that revenues
increase as much as possible.
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Set two prices for tickets: a regular price
and a discount price for people under 25, so that revenues increase
as much as possible.
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Allow free enterance to people under 25,
with the hope of encouraging young people's interest in art,
thereby creating a large pool of potential museum visitors for the future.
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Analyze different options for setting the
ticket prices. Address both the possibility of a uniform price and that
of offering young people a discount price.
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Analyze the different options both with respect to
the number of visitors and to the revenues generated.
Construct functions describing the different possibilities.
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Make recommendations and explain your reasoning.
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