Question

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 1

- 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

- The next one, we just have to divide that amount with stadium's profit margin

$ 3,600,000 / $ 175,000 = 20,57 concerts

So it took about 21 concerts to recoup the loss of the baseball games