Question: The New England Patriots are a professional American football team based in the Greater Boston area. The Patriots play their home games at Gillette Stadium in the town of Foxborough, Massachusetts. The seating capacity of Gillette Stadium is 60,000 (not including club and luxury seats). The Patriots play ten (10) games at Gillette Stadium during the season and fans have two options to get tickets:

• Season Passes: Every season pass grants the holder access to two seats on every home game for one season. Season passes are sold a few months before the start of the season. Based on historical data, the forecasted demand for season passes is
  D S = 20 , 000 - 5 P S,
  where P S is the price of a pass and D S is the number of season passes that will be sold.
• Game Tickets: A game ticket grants the holder access to one seat in a single specific game. Game tickets are sold throughout the season before each game. For each game, the forecasted demand for game tickets is

D G = 100 , 000 - 200 P G ,

where P G is the price of a ticket and D G is the number of game tickets that will be sold.

1. What are the optimal prices that should be charged for each type of ticket. What are the revenues that the Patriots will make during the entire season? What is the marginal value of an extra unit of capacity (i.e., an extra seat on the stadium) over the entire season?
2. Do you see any problem in trying to implement the pricing strategy derived in part (a)? If so, how would you tackle this problem? Explain. If needed, propose an alternative pricing scheme that is more acceptable for you.

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