Problema Solution
Memorial Stadium has traditionally relied exclusively upon 80 baseball games to generate revenue. However, the local baseball team has decided to move to a larger city. It is estimated that profit margin can be maintained or even increased by offering a smaller number of larger events. If the profit margin for a baseball game is $45,000 and the profit margin for an average concert is $175,000, how many concerts would it take to recoup the loss of the baseball games? (Round to the nearest whole number.)
Answer provided by our tutors
First, find out the amount of income for the stadium to generate revenue by multiplying the number of baseball games with the profit margin from the baseball games:
80 X $45,000 = $3,600,000
Next, we just have to divide that amount with stadium's profit margin:
$3,600,000 : $175,000 = 20,57 concerts
It took about 21 concerts to recoup the loss of the baseball games.