[chiliman14]

500 people are willing to pay up to £50 to attend a particular concert. A further 500 are prepared to pay up to £40, and a further 1000 are prepared to pay £30. The capacity of the concert venue is 900 and tickets for places are sold for £25 on a first-come first-served queuing basis with each purchaser restricted to buying a single ticket. All individuals value time spent in a queue as a cost of £5 per hour.

The equilibrium time for queuing is:

A. 1 hour
B. 2 hours
C. 3 hours
D. 4 hours


I have no idea where to begin with this question, so many attempts and I'm very frustrated - if anyone could help I'd be eternally grateful!

[chiliman14]

Anyone?

[DDS]

a.

[chiliman14]

I can do it now; the answers C

[Jasonnoob]

I am looking at this question as well. i wonder how do you calculate it?

[chiliman14]

You need 900 people so at first you look at those who are willing to pay £50 and £40, you would 'charge £40' since this would allow for the 900 capacity to be covered. 40 - 25 = 15. 15 divided by the cost of queuing (£5 per hour) = 3. My explanation isn't the best but this is the way you calculate them, start from those who are willing to pay the most and go down until capacity is covered.